Nikkei flat as Sony extends losses, Toshiba up

TOKYO, May 1 (Reuters) The Nikkei was little changed on Monday as Sony Corp. extended losses after its profit outlook disappointed investors, but Toshiba Corp. advanced after its earnings prompted a brokerage upgrade.

Shares of Canon Inc. and some other exporters fell after the yen rose to a three-month high against the dollar.

Investors were holding back from trade due to concern about what could happen abroad once Japan begins a string of public holidays -- known as ''Golden Week'' -- later this week, said Katsuhiko Kodama, senior strategist at Toyo Securities.

''Right now there are few market participants.... Investors don't know what may happen with the currency during the holidays,'' Kodama said.

''This is a market that has been driven by high-tech stocks, if the yen gets any stronger than this, it will definitely amplify concerns.'' The Nikkei was down 0.01 percent at 16,904.79 as of 0059 GMT.

The TOPIX index was down 0.01 percent at 1,716.28.

Sony fell 2.8 percent to 5,560 yen, adding to its 5.1 percent slide on Friday.

The electronics and entertainment conglomerate last week forecast that its operating profit would fall nearly 50 percent this business year because of the start-up costs for the forthcoming PlayStation 3 game console.

Shares of Toshiba gained 2.9 percent to 746 yen after the electronics firm posted a 70 percent rise in annual net profit on Friday.

The results prompted brokerage Goldman Sachs to raise its rating on the stock to ''outperform'' from ''in-line''.

Canon fell 1.4 percent to 8,590 yen after the yen remained near a three-month high against the dollar.

A stronger yen is a minus for Japan's exporters because it eats into profits when earnings from abroad are brought home.

REUTERS DKS RK0658