Sony on Thursday reported a 29% drop in operating profit in the fiscal second quarter as the Japanese electronics giant suffered from weakness in its imaging sensor — or chip — business.

Here’s how Sony did in the September quarter versus LSEG consensus estimates:

Revenue: 2.8 trillion yen ($18.5 billion) versus 2.87 trillion yen expected. That represents an 8% increase year-over-year.Operating profit: 263 billion Japanese yen versus 304.4 billion yen expected. That marks a 29% drop year-over-year.

Sony attributed the significant drop in profit to weakness in its imaging sensor business, as well as declines in profit at its financial services and entertainment, technology and services businesses.

The company said profit in its chip division fell over 28% in the fiscal second quarter.

Sony supplies camera chips to consumer technology manufacturing giants like Apple, which uses its semiconductors in its iPhones.

Despite the slide in profit, the company increased its sales forecast for the full year, saying it now expects total sales of 12.4 trillion yen (up from earlier forecasts of 12.2 trillion yen) as it benefits from positive foreign exchange rates.

The Japanese yen has weakened significantly versus the dollar, and Sony makes most of its income outside of the U.S.

Sony also attributed to improvement to its revenue forecast to anticipated bumper performance in its video game, music and imaging and sensing solutions businesses.

Sony is expecting its game and network services business, which is responsible for its popular PlayStation console, games studios and gaming networks, to receive higher-than-expected sales in the full year, boosting performance.

The company has seen a strong start to its newly released Marvel’s Spider-Man 2 game, which is exclusive to PS5. The game sold more than 2.5 million copies in its first 24 hours, making it the fastest-selling PlayStation Studios game in history for a 24-hour period.

Sony said it sold 4.9 million PlayStation 5 units in the fiscal second quarter, up from 3.3 million units sold in the fiscal first quarter.

The company said that it expects its PlayStation 5 console to hit its target of 25 million units shipped in 2023. That’s an important milestone as analysts and investors were watching for signs of Sony’s PS5 performance closely.

Sony’s results come after Nintendo earlier this week reported better-than-expected sales and profit for its fiscal second quarter on Tuesday, as it got a boost from the “Super Mario Bros. Movie” and highly anticipated May release of the “The Legend of Zelda: Tears of the Kingdom” game.

In a interview, Sony’s Eric Lempel said this would mark the first year that PS5 is “fully stocked” after shortages that plagued the company in 2020 and 2021 due to supply chain constraints.

“We launched [PS5] back in 2020,” Lempel told CNBC. “We suffered from the same supply chain issues that everybody was dealing with. Unfortunately, we weren’t able to deliver PS5 to ever consumer that wanted one.”

Thursday’s results follow a fiscal first quarter which saw Sony report a 33% rise in revenue year-over-year to 3 trillion Japanese yen but a 31% year-on-year drop in profit to 253 billion yen.

The company at the time cited weakness in its financial services and pictures division, which saw a small slump on the back of strikes carried out by the Writers Guild of America and other unions, in protest against using artificial intelligence to generate movie scripts.

Sony said that it expects the strike to have an impact on its next financial year, but the firm is engaging in cost control measures to minimize it.

The Bank of Japan announced it’s increasing its bond purchases at Wednesday’s auction, as a spike in government bond yields tests its resolve to defend its yield curve control policy.

In a statement Monday, the Japanese central bank said it will conduct an unspecific amount of additional purchases of Japanese government bonds with tenures of more than five years and up to 10 years. This adds to the BOJ’s reported 300 billion yen Friday bond purchase with similar maturities.

Yields on 10-year Japanese government bonds hit as much as 0.775% Monday, its highest since September 2013 and nearing the BOJ’s hard 1% cap. The Japanese yen shed nearly 0.3% to about 149.73 yen against the dollar, nearing the 150 yen level that prompted BOJ intervention last year.

Hawkish comments in the minutes of a lively BOJ September policy meeting released earlier Monday reignited expectations the BOJ is slowly laying the groundwork for the end to negative interest rates.

At its policy meeting in July, the BOJ loosened its yield curve control to allow longer term rates to move more in tandem with rising inflation in Governor Kazuo Ueda’s first policy change since assuming office in April.

The move to broaden the permissible range for 10-year JGB yields from plus and minus 0.5 percentage point around its 0% target to 1 percentage point was seen as the start of a gradual departure from the yield curve control policy enacted by Ueda’s predecessor.

The yield curve control, known also as the YCC, is a policy tool where the central bank targets an interest rate, and then buys and sells bonds as necessary to achieve that target. It’s part of the BOJ’s ultra-loose monetary policy, which also includes keeping short-term interest rates at -0.1% in its attempts to combat decades of deflation in the world’s third-largest economy.

On Monday, a comment by an unnamed policymaker in the September BOJ meeting minutes that “the achievement of 2 percent inflation in a sustainable and stable manner seems to have clearly come in sight” partly added to the yield spike.

At the September meeting though, the BOJ eventually decided to maintain its ultra-loose policy and left rates unchanged on Friday, mindful of the “extremely high uncertainties” on the growth outlook domestically and globally.

Despite core inflation exceeding the central bank’s stated 2% target for 17 consecutive months, BOJ officials have been cautious about exiting its radical stimulus.

This is due to what the BOJ sees as a lack of sustainable inflation, deriving from meaningful wage growth that it believes would lead to a positive chain effect supporting household consumption and economic growth.

Still, the Bank of Japan could be forced into hiking rates sooner than expected if the Japanese yen weakens beyond 150 against the dollar, according to Bob Michele, global head of fixed income at JPMorgan Asset Management.

Higher rates could then unwind the yen carry trade and spark a return of Japanese capital to its domestic bond markets, a move that could trigger market volatility, he told CNBC last Thursday.

SINGAPORE — Shares in Asia-Pacific looked set for a lower start on Wednesday as investors await the release of inflation data from China and the U.S.

The Nikkei futures contract in Chicago was at 26,110 while its counterpart in Osaka was at 26,060 — lower than the Nikkei 225’s last close at 26,167.10.

Australian stocks also appeared poised to dip, with the SPI futures contract at 7,014, against the S&P/ASX 200’s last close at 7,051.20.

China is set to release its inflation data on Wednesday, with the consumer price index and producer price index for April both set to be out at 9:30 a.m. HK/SIN. The data releases come as the mainland continues to battle its worst Covid outbreak since the initial phase of the pandemic in early 2020.

The U.S. April consumer price index is also set to be released Wednesday stateside, and is expected to come in slightly below March’s 8.5% which could signal that inflation has reached a peak.

“The US CPI for April is today’s, indeed the week’s, highlight,” Joseph Capurso, head of international economics at Commonwealth Bank of Australia, wrote in a note.

“The consensus of US economists expect headline inflation to decelerate significantly from 1.2%/mth in March to only 0.2%/mth in April because retail petrol prices have stabilised. But core inflation is expected to step up slightly from 0.3%/mth in March to 0.4%/mth in April,” Capurso said.

Overnight on Wall Street, the S&P 500 climbed about 0.25% to 4,001.05 while the Nasdaq Composite gained 0.98% to 11,737.67. The Dow Jones Industrial Average lagged, falling 84.96 points — or 0.26% — to 32,160.74.

The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 103.92 — above levels below 103.8 seen earlier in the week.

The Japanese yen traded at 130.34 per dollar, stronger as compared with levels above 130.5 seen against the greenback earlier this week. The Australian dollar changed hands at $0.6937 as it struggles for a bounce after declining from above $0.70 earlier in the week.

SINGAPORE — Shares in Chinese tech firms mostly rose in mixed Asia-Pacific trading on Monday, with oil prices falling more than 3%.

The Hang Seng index in Hong Kong advanced 1.05%.

Shares of Meituan soared 10.89% while Tencent climbed 2.86%, as of the final hour of trading in Hong Kong on Monday.

Meituan on Friday posted better-than-expected revenue for the last three months of 2021. The company’s revenue for the fourth quarter came in at 49.52 billion yuan ($7.78 billion), above mean analyst expectations for a 49.2 billion yuan print, according to data from Refinitiv Eikon.

The Hang Seng Tech index remained in positive territory, rising 2.13%. Some Chinese tech stocks, however, slipped: Baidu edged 0.63% lower while JD.com dropped 3.06%.

“Even if you look now, where we see very significant and sharp falls so that valuations now are at much more reasonable levels, I think it’s still quite difficult for investors … to really build the courage to go back in at these levels,” Mark Konyn, group chief investment officer at AIA, told CNBC’s “Squawk Box Asia” on Monday.

The broader Asia-Pacific markets struggled for direction on Monday.

Mainland China’s Shanghai composite gained 0.07% to close at 3,214.50 while the Shenzhen component shed 1.017% to 11,949.94.

In Australia, the S&P/ASX 200 closed fractionally higher at 7,412.40. Singapore’s Straits Times index also climbed 0.38% in afternoon trade.

MSCI’s broadest index of Asia-Pacific outside Japan traded 0.11% lower.

Oil prices declined in the afternoon of Asia trading hours, with international benchmark Brent crude futures down 3.52% to $116.40 per barrel. U.S. crude futures slipped 3.97% to $109.38 per barrel.

The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 99.2 following a recent climb from below 98.7.

The Japanese yen traded at 123.61 per dollar, weaker than levels below 120 seen against the greenback last week. The Australian dollar was at $0.7512, having risen from below $0.74 last week.

Correction: This article was updated to accurately reflect the moves of the Japanese yen during Asia trading hours on Monday.