TOKYO — Japanese car giant Toyota on Tuesday raised its full-year profit forecasts on the back of the weak yen, days after Tokyo and Washington moved to boost the beleaguered currency.
The world’s largest automaker by sales said the decision reflected “changes in the external environment such as foreign exchange assumptions, as well as marketing efforts including the establishment of alternative logistics routes to the Middle East.”
For the current year to March 31, 2027, Toyota expects net income of 3.25 trillion yen ($20.6 billion), up from its previous projection in May of 3.0 trillion yen.
The forecast still foresees a fall in profit by 15.5 percent from the bumper 3.8 trillion yen that Toyota earned in 2024–2025.
It predicted operating income of 3.4 trillion yen, up from the last forecast of 3.0 trillion yen, and revenues of 54.0 trillion yen, a rise of 6.5 percent from the previous year.
First-quarter net income soared 75.6 percent to 1.5 trillion yen, beating market expectations.
Operating income fell 8.8 percent the fifth straight quarterly drop to 1.1 trillion yen and revenues rose 10.4 percent to 13.5 trillion yen, Toyota said.
It credited currency effects, cost reductions and higher sales of hybrid electric vehicles, helping to compensate for the “impact of the Middle East situation.”
However, total vehicle unit sales fell 2.8 percent year on year during the first half of the 2026 calendar year, weighed down notably by a 17.1-percent plunge in China, a crucial market where it faces fierce competition from local manufacturers.
Japan and the United States confirmed on Monday that they intervened jointly in financial markets last week, buying yen for the first time since the Asian financial crisis in 1998.
The intervention came after the yen hit 163.99 per dollar last month, its weakest since 1986.
On Friday, it soared to 157.40 and on Tuesday was trading around the same level after a jump on Monday that some traders thought was due to another intervention.
The yen has weakened because of the gap between Japanese and US interest rates, high oil prices and concerns about Prime Minister Sanae Takaichi’s spending plans further swelling Japan’s enormous debts.
Part of President Donald Trump’s rationale was to help American companies such as Toyota’s rivals like General Motors and lower the US trade deficit, analysts said.
The weak yen in recent months has inflated import costs for resource-poor Japan, especially oil just as the war strangles supplies from the Gulf.
A weaker currency also means that money earned abroad converts into more yen, while also helping Japanese exporters price their products more competitively.
Consumer electronics giant Sony last week also hiked its annual forecasts, helped by strong sales in its video games division and the feeble yen.
But Japanese automakers are also being squeezed by US tariffs, the Middle East war and fierce competition from Chinese rivals.
Honda last year posted its first annual loss since 1957 blamed in part on Trump scrapping tax incentives for electric cars.
Honda also said there was a “decline in competitiveness” of Honda products in China and other Asian countries.
Nissan ended its last business year 533 billion yen in the red following an even more colossal loss of 671 billion yen the previous year.
Nissan on Monday stuck to its forecast that it would eke out a net profit of 20 million yen in the current year after a surprise profit in the first quarter. afp
