Japanese Automakers Forecast Weak Yen Despite US-Japan Intervention

Toyota Motor Corp. and other major Japanese automakers forecast the yen will continue to trade weakly against the US dollar, projecting a range between 150 and 160 yen for the fiscal year ending March 2027. These projections come after the governments of the United States and Japan conducted a joint currency market intervention to curb the yen's slide and combat inflation.

Automakers view the government intervention as a tool to prevent extreme volatility rather than a fundamental shift in the currency's direction. While a weaker yen generally boosts the profitability of exported vehicles and parts, the impact varies by company. Toyota has already reported an operating profit increase of approximately 345 billion yen in the first quarter due to the currency's weakness and has upgraded its sales and profit outlook.

Other manufacturers face a more complex landscape. Nissan Motor Co. and Honda Motor Co. may struggle to convert currency gains into higher overall profits due to difficulties expanding their sales volumes in the US market. Nissan based its profit outlook on a value of 150 yen, while Honda and Mazda Motor Corporation revised or maintained assumptions around 155 yen.