Japan's Sony Corp will transfer domestic construction of lithium ion batteries used in products like mobile phones and electric cars overseas by March 2014, as it works to overcome the strong yen, the Asahi newspaper reported on Saturday.

The consumer electronics giant will move the assembling of the batteries to factories in China and Singapore, but continue producing the parts needed for production in Japan, the national daily said, without citing sources.

As part of the move, Sony plans to convert its Tochigi Prefecture lithium ion battery factory into a research facility and is considering asking about 500 workers to apply for job reshuffling or voluntary retirement, the paper added.

Sony also has two lithium ion battery factories in Fukushima Prefecture, located in Eastern Japan.

The move comes as rival consumer electronics maker Panasonic Corp is working to lift its production of lithium ion batteries in China as it cuts back on domestic production.

Japanese firms were long the dominant producers of lithium ion batteries, but have lost the lead to South Korean makers such as Samsung SDI Co.

The historically strong yen, which makes goods from Japanese exporters' more expensive overseas, has also pressured firms to shift manufacturing capacity abroad.

Sony, which saw its debt ratings downgraded by Moody's on Friday, is expected to post on February 2 a fall in earnings for the October-December quarter, due to the strong yen, weak consumer sentiment in Europe and the effects on their operations of flooding in Thailand.

(Reporting by James Topham; Editing by Alison Birrane)

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