Toyota raises forecast on profit jump, weak yen

Toyota raised its annual earnings forecast after posting a 23% jump in quarterly profit Wednesday as a favorable exchange rate added to the momentum of the Japanese automaker’s sales growth.

Toyota Motor Corp.’s fiscal second-quarter profit was a better-than-expected 539 billion yen ($4.7 billion). Sales grew 4% to $58 billion as a weak yen boosted the value of overseas revenue.

Unlike other Japanese automakers that have worked hard to move production abroad to reduce the risks of a fluctuating yen, Toyota has kept much of its production in Japan, partly because of political pressures. That is now paying off in a big way.

Toyota, the world’s top-selling automaker, raised its profit projection for the year through March 2015 to $17.5 billion. That would be an increase of 10% from the previous year.

The rosier projection is despite a lowered forecast for sales, to 9.05 million vehicles. Sales are languishing in the once booming market of China. Japan has taken a hit after the consumption tax was raised in April. But Toyota’s sales are expected to hold up in the U.S., Europe, South America and Africa.

Toyota Executive Vice President Nobuyori Kodaira credited cost reductions and marketing efforts along with the weak yen for the favorable results.