In a shock move, Sony has dropped its yearly earnings forecast by 57%.

In July, the company confidently forecasted profits for the current financial year , ending March 2009, to be 470 billion yen (£940m), but today Sony has cut that figure to 200 billion yen, pointing an accustory finger at the strength of the yen against the dollar and the euro, big losses on the Japanese stock markets and stiff price competition.

Even though analysts had predicted that Sony would drop its forecast due to current global economic slowdown and flagging sales of its electrical products, noone had predicted such a huge downgrade.

Following the news, Sony shares have slumped on the Tokyo stock market by 155 yen, to 2295.