The stronger yen currency has resulted in Toyota trimming its annual operating profit forecast despite posting a good set of quarterly results.

Consolidated vehicle sales for the current fiscal year first quarter ended June 30 totaled 2,303,495 units, an increase of 67,364 units compared to the same period last fiscal year. On a consolidated basis, net revenues for the period totaled 7.6460 trillion yen, an increase of 3.8%. Operating income increased from 682.6 billion yen to 741.9 billion yen, while income before income taxes was 841.7 billion yen. Net income increased from 657.3 billion yen to 682.9 billion yen.

For the fiscal year ending March 31, 2020, Toyota has not revised its consolidated vehicle sales forecast from 9m units. However, the company revised its consolidated financial forecasts for the fiscal year ending March 31, 2020.

Based on an exchange rate assumption of 106 yen to the US dollar (previously 110 yen to dollar) and 121 yen to the euro (previously 125 yen to euro), Toyota now forecasts consolidated net revenue of 29.5 trillion yen (previously 30.0 trillion yen), operating income of 2.4 trillion yen (previously 2.55 trillion yen), income before income taxes of 2.56 trillion yen (previously 2.72 trillion yen), and net income of 2.15 trillion yen (previously 2.25 trillion yen).

Commenting on the operating income forecast for the fiscal year, TMC Operating Officer Kenta Kon said: “There is a 180 billion yen negative impact relating to the changes of FOREX rate assumptions. In order to offset such impact even slightly, we plan on an additional 25 billion yen positive effect of profit improvement activities through cost reductions and reductions in expenses.”

The yen is being driven higher versus the dollar as trade tensions continue between China and the US.