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Japan carmakers forecast yen stays near post-intervention levels

Toyota, Nissan, Honda, and Suzuki are planning for the yen at about ¥150 to ¥160 per dollar through fiscal 2026 to fiscal 2027, reflecting their profit outlooks after US-Japan currency support.

Reported · Written up by our desk · Central Banks

Japan’s automakers are basing their profit and sales outlooks on the assumption that the yen will remain near its current trading range against the US dollar following recent currency-market intervention by the US and Japan, according to LiveMint Markets.

Toyota Motor Corp., Nissan Motor Co., and other manufacturers forecast the yen will hold at roughly ¥150 to ¥160 per dollar for the fiscal year ending March 2027, with the yen recently around ¥157.7. Their planning follows joint action by the two governments over the past week, the first such step since 2011, aimed at reversing yen weakness that policymakers said could raise inflation and import prices in Japan.

The industry view is that the intervention is more likely to act as a brake on extreme moves than to change the yen’s fundamental direction, given interest-rate differentials and capital flows that continue to weigh on the currency. A stronger yen could ease pressure on import prices, but it would also reduce earnings because overseas sales translate into lower profit when repatriated.

Carmakers revised yen assumptions toward weakness from levels set in May, with Toyota, Honda, and Suzuki adjusting, while others left forecasts unchanged. Even with yen weakness expected to persist, sharp swings remain a risk because a sudden yen rise can quickly shrink profits from exports before companies can adjust pricing or production, Bloomberg Intelligence analyst Tatsuo Yoshida said.

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