Toyota Motor Corp. on Wednesday said its annual net income will likely decline for the first time in five years, as currency fluctuations that had spurred profits now pose stiff headwinds.
According to a statement released by the Japan’s largest company, net income may decline 35 percent to 1.5 trillion yen for the fiscal year ending in March.
The company expects the effects of current foreign exchange to affect about 935 billion yen in the year started April 1. The automaker plans to buy back up to 3.42 percent of its shares for around 500 billion yen during this period, while focusing on regions like China for sales.
The Japanese yen has gained more than 10 percent this year against the U.S. dollar, leading to stall demand from the country. Toyota is currently trying to recover from production disruption to keep ahead of German’s Volkswagen AG by worldwide sales.
Earlier this week, Japanese Finance Minister Taro Aso said the continuous gain of the yen against its counterparts is undesirable and necessary actions will be taken. It is expected that Japan will intervene sooner or later if exports is to pick-up.
The yen lost 1.9 percent against the dollar yesterday to peak at 109.36 before dropping back to 108.64 as at the time of writing.