Given lack of sleep over a long enough period of time, and you will experience hindered perception. The line between imagination and reality blurs to a point where you can't quite distinguish between what is true, and what you're actually thinking may be true, hence making interpreting signals people give off even harder.

I tend to think I have a somewhat empathic sense when it comes to people. I can tell when they're sad, hurt, offended, and so on. What I'm stating, however, is I'm fairly sure that this empathic sense isn't something you'd want to attempt to employ when tired, simply because the probability of it being anywhere near as correct as it should be is high.