Toyota braces for impact of stronger yen, cuts profit forecast

Toyota flagged its smallest annual profit in four years for 2016/17 as the Japanese automaker braces for the impact from a strengthening yen amid slowing demand for some of its car models in the key North American market.

The world’s biggest automaker by market value cut its full-year operating profit forecast on Thursday to 1.6 trillion yen, expecting it to fall 44 per cent from a year ago to its lowest since 2013.

Toyota trimmed its forecast from the 1.7 trillion yen given in May as it revised its budgeted yen rate to 102 versus the dollar and 113 against the euro from previous forecasts of 105 and 120 yen respectively.

It promised steeper cuts to labour costs and tighter control over expenses to offset the worsening currency impact.

For the April-June quarter, an appreciating yen pushed operating profit down 15 per cent to 642 billion yen. That beat an average estimate of Y493.5 billion.

Toyota’s global vehicle sales rose during the first quarter on higher sales in Japan, Europe and Asia. However, sales fell in North America. – (Reuters)