Honda Motor's 2008/9 fiscal year operating profit is likely to be ahead of the company's projection by a small margin thanks to a weaker yen and better than expected sales in China, a Japanese newspaper said on Wednesday.

Honda is expected to book an operating profit of about JPY150bn (US$1.5bn) for the year to 31 March, the Nikkei business daily said.

That would be JPY10bn more than the company had projected, and above a consensus for a JPY142.3bn profit from a poll of 18 brokerages by Reuters Estimates but still an 84% plunge from a year earlier, according to the news agency.

A weaker yen than estimated earlier pushed profit up over JPY20bn in the last fiscal quarter, the paper said.

Earnings were also helped by a 2.5% rise in Chinese sales. Honda's China chief Atsuyoshi Hyogo has also said he expects sales there to grow 10% this year.

For the current financial year, Honda aims to maintain an operating profit through cost cuts although global unit sales will likely fall about 10% year on year, the paper said.

"I think profits were simply boosted by a weaker yen. We can't expect a recovery in sales just yet and even in China the improvement in their sales doesn't seem that great," Fujio Ando, senior managing director at Chibagin Asset Management, told Reuters. "It looks like Honda is still struggling with excess inventories in the US market, and this will continue to be a big burden for them for a while."