Toyota on Thursday announced a recall of almost 136,000 compact cars in Japan and Europe to fix a steering problem, the latest in a series of issues that have tarnished its once stellar reputation.

The automaker told AFP it would recall 65,000 compact iQ and Passo cars in Japan and about 70,800 in Europe, all built between 2008 and 2010.

The recall was made after it was found that power steering sensors could malfunction when driving over bumps, making steering more heavy, a spokesman said, adding there had been no reports of accidents related to the issue.

The company said it would fix the necessary software on all cars.

Toyota GB spokesman Scott Brownlee noted that the recall was based on just 37 reported cases of warning light activation when driving over rumble strips, only in Japan.

Toyota is recalling of 64,620 units in Japan and affiliate Daihatsu will recall 2,201 units of its Boon car, produced between February and June this year, due to a similar defect.

Toyota GB said it would recall and fix about 12,000 cars.

"The issue affects certain iQ vehicles, produced between 11 September 2008 and 22 October 2010. When driving on certain roadside safety side strips or 'rumble strips', signals received by the EPS sensors may be incorrectly interpreted by the EPS control unit, triggering the EPS warning light. Should this happen, the driver would need to apply extra effort to steer the vehicle," it said in a statement.

"This issue has only been observed in very specific circumstances in Japan. No cases have been reported in Europe and no accidents related to the issue have been reported."

Repairs involving update or replacement of the EPS control unit software will take around two hours to complete.