Toyota plans to cut domestic output by 6% this business year as it shifts more of its production overseas, the Nihon Keizai Shimbun newspaper said according to Reuters.

The newspaper said that Toyota expects to build between 3.0 and 3.3 million vehicles in Japan in the year from April, although it aims to keep sales stable at around 1.7 million units, Reuters reported. Toyota, like many of its domestic rivals, is increasingly shifting production to the regions where the cars will be sold to boost efficiency and reduce currency risks.

This year, Toyota is set to expand its output capacity in the key North American market by around 18% to 1.48 million units, Reuters said.

The news agency said the shift in production is bad news for Japan's economy, which is already suffering from high unemployment and has relied significantly on exports for its marginal growth.

A Toyota spokesman told Reuters he could not confirm the report, adding that production plans for this business year would be announced on May 8, along with earnings results.

For calendar 2003 Toyota has said it would cut Japanese production by 3% from the previous year to 3.39 million units, Reuters noted.

"We see an output level of between 3.0 and 3.5 million units in Japan as appropriate," Toyota spokesman Shinya Matsumoto told the news agency.