Toyota raises profit forecast, plans 1tn yen buyback

Toyota raised its full-year profit forecast on Tuesday and announced a one-trillion yen share buyback, saying currency effects and other measures helped offset pressure from the Middle East situation and competition in China.

The Japanese automaker now expects net income of 3.25 trillion yen, or $20.6 billion, for the year to March 31, 2027. It had forecast 3.0 trillion yen in May. The new outlook is still below the 3.8 trillion yen Toyota earned in the previous year.

Toyota forecast operating income of 3.4 trillion yen, up from its previous forecast of 3.0 trillion yen, and revenue of 54.0 trillion yen, a 6.5 percent rise from the previous year.

For the first quarter, Toyota said net income rose 75.6 percent to 1.5 trillion yen. Operating income fell 8.8 percent to 1.1 trillion yen, while revenue rose 10.4 percent to 13.5 trillion yen.

The company said currency effects, cost reductions and higher sales of hybrid electric vehicles helped compensate for the impact of the Middle East situation. Total vehicle unit sales fell 2.8 percent year on year in the first half of the 2026 calendar year, including a 17.1 percent drop in China.

Toyota executive Takanori Azuma said it had been impossible to pass through the Strait of Hormuz, forcing shipments to the Middle East to detour around the Cape of Good Hope in South Africa and doubling logistics lead times. He said Toyota was developing routes including transferring vehicles before the strait and moving them overland into the Middle East.

Toyota shares fell almost 2 percent on Tuesday.

Japan and the United States intervened jointly in financial markets last week, buying yen for the first time since the Asian financial crisis in 1998. The yen hit 163.99 per dollar last month, its weakest level since 1986, and traded around 157.40 on Friday and Tuesday.

A weaker yen can increase the yen value of overseas earnings and help Japanese exporters price goods more competitively abroad, while raising import costs for Japan.