Tokyo stocks open down 0.87%

TOKYO (AFP) - Tokyo stocks opened 0.87 per cent lower on Thursday as a stronger yen hit exporters, while Sony dropped sharply after it reported a huge full-year loss and warned of more red ink to come.

The Nikkei 225 index lost 125.25 points to 14,280.51 at the start.

Just before the market opened, government data showed Japan's economy grew 1.5 per cent in the three months to March, expanding at the fastest pace in more than two years on rush demand before a tax hike in April.

A stronger yen, however, apparently trumped the buoyant data, as it makes exporters less competitive abroad and erodes their repatriated profits.

In currency markets, the dollar fetched 101.72 yen early Thursday, down from 101.87 yen in New York Wednesday afternoon and above 102 yen in Tokyo earlier Wednesday.

The euro also fell to 139.55 yen from 139.70 yen in US trade while edging up to US$1.3717 from US$1.3701.

Sony shares opened sharply lower after the struggling electronics giant warned Wednesday it would remain in the red for another year after it booked a US$1.26 billion (S$1.58 billion) annual loss, as the struggling firm undergoes a painful restructuring.

The stock was down 6.59 per cent at 1,686 yen in early trade.

US stocks finished lower on Wednesday following mixed earnings and a surprising rise in producer prices, snapping a five-day winning streak for the Dow that included three straight record closings.

The Dow Jones Industrial Average slumped 0.61 per cent to 16,613.97 while the broad-based S&P 500 fell 0.47 per cent to 1,888.53.