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Toyota warned that its annual operating profit would fall for the first time in four years, with the US-China dispute pushing up the yen.
Forecasts have been lowered even as Japan's largest automaker has reshaped its cost structure and despite a robust first quarter driven by increased vehicle sales in Japan, Europe and other parts of Asia .
For the fiscal year up to March 2020, Toyota said it is now expecting operating profit of 2.4 billion yen ($ 22 billion), a drop of 5.9% compared to its projection in May, which would represent a decrease of 2.7% compared to the previous year. It has also reduced its revenue forecast by 1.7%.
The Japanese group blamed the yen for upward deterioration by revising its exchange rate forecast to ¥ 106 for the dollar and ¥ 121 for the euro, compared with the previous forecast of ¥ 110 and ¥ 125, respectively.
Japanese companies are preparing for a new appreciation of the yen, which is hurting the value of sales and profits abroad, as the trade dispute between the US and China intensifies.
For the quarter from April to June, Toyota said its net profit rose 3.9% over the previous year, to 683 billion yen over a 3.8% increase in its turnover figure.
Toyota shares fell 3.1% after lowering its guidance.
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