By Anton Bridge

TOKYO (Reuters) -Japan's SoftBank Group posted a surprise loss but said it was dipping its toes back into new investments after its Vision Fund unit returned to the black for the first time in six quarters.

The Vision Fund unit booked an investment gain of about 160 billion yen ($1.1 billion) for the April-June period, helped by an increased valuation for Arm, the chip designer slated for an initial public offering later this year.

Without the fillip from Arm, the picture was less rosy with the company's Vision Funds reporting a combined loss of 13 billion yen.

The investment giant has been in "defence mode" since May 2022 after tech valuations crashed due to sharply higher interest rates and jitters that hit the global banking sector. But this June, founder and CEO Masayoshi Son said he was planning to shift to "offence" mode amid excitement over advances in artificial intelligence.

That shift was borne out in the first-quarter results, with Chief Financial Officer Yoshimitsu Goto telling reporters on Tuesday that the company was "timidly" embarking on selective new investments.

SoftBank made investments totalling $1.8 billion in the quarter. That's after paring them right back to around $500 million for the previous three quarters.

"The bar for investment is very high", added Vision Fund finance chief Navneet Govil. "They have to be companies that are focused on next-generation AI with high growth potential".

The unit divested around $890 million worth of holdings including full exits of three portfolio companies and partial exits of several public portfolio firms.

Son has had to adopt a more prudent stance to investing after several high-profile investment setbacks, most notably flexible workspace provider WeWork, whose shares have fallen 98% since listing publicly in October 2021.

The Vision Fund unit laid off some staff in the quarter just ended, Govil said, confirming a Reuters report about the cuts and following an earlier round of headcount reductions in September 2022.

A source had said up to 30% of the unit's staff could be laid off. Govil did not give a figure but said the unit was now "right-sized".

Overall, SoftBank reported a third consecutive quarterly loss, hit by declines in valuations for major investments such as Alibaba Group, Deutsche Telekom, and T-Mobile U.S..

Its net loss came to 477.6 billion yen ($3.3 billion), a fraction of its loss of 3.16 trillion yen for the same period a year earlier but a stark contrast to market expectations for a 75 billion yen net profit.

SoftBank has been targeting a listing for Arm since its deal to sell the chip designer to Nvidia Corp collapsed last year due to objections from U.S. and European antitrust regulators.

The planned U.S. listing could raise between $8 billion and $10 billion, sources told Reuters in April. Goto provided no details on a listing date or fundraising goal, but said preparations were going "very smoothly".

Arm reported a 10.8% drop in quarterly sales to $641 million amid a global chip industry downturn on weak consumer demand.

($1 = 142.9500 yen)

(Reporting by Anton Bridge; Additional reporting by Sam Nussey; Editing by Miyoung Kim and Edwina Gibbs)