adminTOKYO. — Toyota Motor Corporation, the world’s largest carmaker, raised its full-year profit forecast by 13 percent as the weaker yen boosted earnings from Prius and Lexus vehicles exported from Japan. Net income will probably rise to 1,67 trillion yen in the year ending March 31, the Toyota City, Japan-based carmaker said in a statement yesterday. That compares with the previous forecast of 1,48 trillion yen and the 1,82-trillion-yen average of 22 analyst estimates compiled by Bloomberg.
Toyota earned more profit than General Motors Co and Volkswagen AG combined last quarter, helping restore confidence in the idea that Prime Minister Shinzo Abe’s policies, which have helped the yen weaken against every major currency in the past year, are giving Japanese exporters an edge.
Optimism about Abenomics had been wavering this earnings season at Japan Inc. as companies from Sony Corp to Nissan Motor Co cut their profit forecasts.
“Toyota is the company that’s benefited most from Abenomics because of the currency,” said Takaki Nakanishi, founder of industry research firm Nakanishi Research Institute and the top ranked auto analyst by Institutional Investor magazine. “The prime minister will probably say this is a win for Abenomics, that his direction is right and that Toyota’s earnings are good proof.”
Toyota rose 2,9 percent as of 9:05am in Frankfurt trading, headed for the biggest gain since August 22. The carmaker gained 0,5 percent to close at 6 350 yen in Tokyo before reporting results, compared with the 0,8 percent advance by the Nikkei 225 Stock Average. The stock has gained 59 percent this year.
The yen has fallen about 12 percent against the dollar in 2013, helped by Abe’s monetary easing policies. The currency traded at an average of 99 yen last quarter, a decline of 20 percent from a year earlier.
Toyota based its financial forecasts on a level of 97 yen to the dollar and 130 yen to the euro. Every one-yen decline boosts operating income by about 40 billion yen at Toyota, compared with 15 billion at Nissan, the companies said in May.
Toyota’s results come amid waning optimism over Japanese carmakers. Last week, Honda Motor Co. reported second-quarter earnings that missed analysts’ estimates and Nissan cut its annual profit forecast. The yen is becoming decreasingly volatile in recent months, with the exchange rate stabilising to between 97 and 99 against the dollar.
“In the past couple of months we could say the weak yen have pushed up profits of the carmaker,” said Yuuki Sakurai, chief executive officer of Fukoku Capital Management Inc. “I don’t think it will keep weakening, and we may even see a strong yen if the US economy doesn’t improve very much.” —Bloomberg.
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