Toyota sees lower annual operating profit on higher yen

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Toyota Motor on Wednesday forecast a 4.2 percent slide in operating profit for the current financial year, as it expects a stronger yen to offset slightly higher global vehicle sales and cost reductions.

Japan’s biggest automaker expects operating profit to ease to 2.3 trillion yen in the year to March 2019, slightly higher than a median forecast for 2.19 trillion yen from 23 analysts polled by Thomson Reuters I/B/E/S.

Operating profit was 2.4 trillion yen in the year ended March.Toyota’s forecast is based on the assumption that the yen will trade around 105 yen to the U.S. dollar in the current financial year, compared with 111 yen in the year just ended.

A stronger local currency can dent profits repatriated from overseas and raise the cost of finished products and parts when they are shipped between countries.

Toyota shares were higher by 2.71 percent at 12:46 p.m. HK/SIN, amid declines seen in other major Japanese automakers.

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