(by Sh. Nakata)

The benchmark Nikkei 225 average was off 1.3 per cent to 11,056.41, while the broader Topix index was down 1 per cent at 1,118.91.

Sony on Wednesday unveiled a surprise operating profit for the first quarter, exceeding its own forecast, but the weakness of its performance compared with its rivals indicated it still has some way to go before it regains leadership of the booming consumer electronics sector.

The electronics to entertainment group said operating profits for April-June fell 41 per cent to Y9.8bn from Y16.7bn a year earlier, mainly as a result of a stronger yen and restructuring charges, while sales were flat at Y1,612bn.

Sony shares fell 2.1 per cent to Y3,830. Shares of Matsushita Electric Industrial, the maker of Panasonic-brand goods, fell 2.7 per cent to Y1,427 and Advantest shares were down 2.2 per cent to Y6,930.

Elsewhere, Honda shares gained 2.1 per cent to Y5,260 after the carmaker raise its operating profit forecast by Y20bn to Y580bn for the fiscal year ending March 2005.