Toyota is recalling over 110,000 hybrid vehicles in the United States, Japan and Europe because of faulty transistors in electrical power control boards.

The US market is the most affected, with 45,500 units of the 2006 and 2007 Highlander [Kluger] Hybrid and 36,700 Lexus RX 400h vehicles being recalled due to "inadequate soldering".

Toyota said in a statement "the intelligent power module (IPM) located inside the hybrid system inverter contains a control board with transistors. Certain transistors on the control boards in some of the subject vehicles were inadequately soldered and could be damaged from heat caused by a large current flow during high-load driving".

"If this were to occur, various warning lamps will illuminate on the instrument panel. In most cases the vehicle will enter a fail-safe driving mode, resulting in reduced power in which the vehicle can still be driven for short distances.  In limited instances, the power supply circuit fuse could blow when the transistor is damaged. If the fuse blows, the hybrid system will stop and the vehicle will coast to a stop."

Roughly 3,000 of the same vehicles are also being recalled in Canada, a Toyota spokeswoman told AFP. Toyota is also recalling 11,164 of the same vehicles in Japan for the same defect.

In Europe, the recall will cover roughly 15,000 vehicles, the spokeswoman said. Toyota said it is "working on" obtaining replacement parts and will notify owners when available.

Toyota has recalled millions of vehicles since 2009 over safety defects and paid US authorities nearly US$50m in penalties.

Earlier this month it had to recall some 139,000 vehicles globally, including 106,000 first-generation Prius hybrid vehicles, because of a problem with the steering system.

Ratings agency Moody's on Tuesday said it had downgraded Toyota and its affiliates by one notch to Aa3, citing concerns for its profitability against a strong yen and materials costs, AFP noted. It said the ratings remain on review for possible further downgrade.

Toyota had said it expected net profit in this fiscal year to drop 31% year-on-year to $3.5bn on a strong yen and the effect on production of the March earthquake and tsunami. The company expects to stage a recovery in the second half as supply problems caused by the earthquake fade.