Nissan is projecting a near 8% decline to operating profit in the current fiscal year as its bottom line is weighed down by negative currency developments and weaker demand in key markets.

Nissan expects to post operating profit of 685 billion yen (-7.7%) this fiscal year (ends March 31 2018), on revenues of 11.8 trillion yen.

In the last fiscal year (period ended March 31, 2017), Nissan generated an operating profit of 742.2 billion yen (-6.4%, but +29.1% adjusted for currencies) on net revenues of 11.72 trillion yen (-3.9%) as strong sales in the US, China and Western Europe partly offset the impact of foreign exchange and weakness in emerging markets.

The company also faced challenges in its home market last year associated with the withdrawal of its Kei class cars supplied by fuel-test scandal hit Mitsubishi.

As is the case with other Japanese companies, Nissan’s results are being impacted by the strong yen, especially versus the dollar. In 2015, the exchange rate averaged around 120 yen to the dollar. In the fiscal year just ended, the average was 108.

For the fiscal year ended March 31, Nissan’s global unit sales were 5.63 million units. The company expects to sell 5.83 million units in the current fiscal year (ends March 31, 2018). It says recently-launched models including the Nissan Micra, Armada, Kicks, and Note e-POWER and Serena in Japan, will contribute to sales growth this year.

In the US, Nissan’s sales rose by 4.2% to 1.58 million units in the last fiscal year, boosted by strong demand for the Rogue SUV. However, the US market is now struggling to post growth and marketing costs are rising as OEMs generally resort to higher incentives to maintain sales levels.

Nissan unit sales in China, which reports figures on a calendar year basis, rose 8.4% to 1.35 million units. In Europe, excluding Russia, Nissan’s sales rose by 7.2% to 683,000 units, boosted by the Qashqai SUV and Navara pickup.

Nissan said its performance in these key markets helped offset challenging conditions in the Japanese market, reflecting the suspension of Kei car sales in the first half. Sales in Japan – where Kei car sales have resumed – reached 557,000 units for the 12-month period ended March 31. In other markets including Asia and Oceania, Latin America, the Middle East and Africa, Nissan’s sales decreased 3.3% to 808,000 units.