Business

Strong yen weighs on Toyota profits

Toyota logo Image copyright Getty Images

Japanese carmaker Toyota has reported a 15% drop in its first quarter net profit with the strong yen weighing down the company's exports.

For the months from April to June the firm posted 552.5bn yen ($5.4bn, £4bn) in net profit, down from 646.4bn yen.

Global economic uncertainty has seen the yen become a safe haven currency, making Japanese products more expensive on international markets.

It means earnings abroad translate into fewer yen when repatriated.

Toyota also lowered its forecast for full-year operating profit, predicting a 44% slide to 1.6tn yen - which would be the lowest in four years.

The firm had reported three straight years of record profits after Japanese Prime Minister Shinzo Abe unleashed a stimulus programme aimed at weakening the yen.

But the currency has risen sharply following the UK's vote to exit the European Union as investors buy into its perceived haven status.

For the financial year ending in March 2016, Toyota earned a record 2.3tn yen ($23bn; £17.7bn), but the company had already warned that profits are set to fall this year.

Related Topics

More on this story