Sony today confirmed the worst about its performance through the global economic slump by announcing its biggest group operating loss of Y228 billion, (£1.6 billion).

The Japanese company also predicted another year of losses for the period ending March 2010.

However, the expected loss, though large at Y110 billion, was substantially lower than consensus forecasts in the market. It was, said brokers in Tokyo, a pleasant surprise, though not necessarily one that justified the 34 per cent rise in Sony’s share price since the start of this year.

The numbers pile more pressure on Sony’s chairman, president and chief executive, Sir Howard Stringer. Investors are convinced that Sony’s Welsh-born head is preparing for another significant round of restructuring and product launches. His most recent management move was to install four “young stars” – executives more attuned to his way of thinking and less constrained by Japanese corporate tradition.

The first physical manifestation of Sony’s new ethos is expected to be the launch of a fresh version of its PSP portable games machine: the handheld device, which may be unveiled at the E3 games industry conference in Los Angeles next month, could dispense entirely with disc-based software and represent a move to networked devices that Sir Howard believes is long overdue at Sony.

The broader Sony restructuring is expected to include further job cuts, possibly through the closure of entire divisions that once lay at the core of Sony’s electronics business but are now unable to compete effectively as products such as LCD televisions become more cheaply available.

With its business spread globally, and products spanning the media content and electronics sectors, Sony was hit especially hard last year by the persistent strength of the yen and the abruptness of the consumer slowdown in the US. Plummeting mobile phone sales have been disastrous for sales at Sony’s joint venture with Ericsson, and the Playstation 3 games console has been forced to fight a punishing battle with Nintendo’s much cheaper Wii.

Sony’s results came as markets across Asia buckled under new worries over the strength of US consumption.

Stocks in Tokyo and Hong Kong plunged by about 3 per cent apiece, with traders describing “something worse than a breather” in the nine-week rally that has pumped Asian shares about 30 per cent higher.

US retail sales fell in April for the second consecutive month – an indicator that it may still be too early for Asian manufacturers to begin ramping-up production again, although they have now spent months aggressively slashing inventories.

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