Honda Motor Co. has raised its full year forecast for operating profit for the second time during its current fiscal year as the automaker cited a favorable impact from rates of foreign exchange as the yen weakened following the election of Donald Trump as U.S. President.
Operating profit is expected to increase to over 785 billion yen equal to $6.9 billion during its fiscal year that ends in March, up from a forecast during October of 650 billion yen, said the automaker based in Tokyo on Friday.
Analysts have predicted operating profit for Honda to end the year at 770.4 billion.
The yen weakened versus the U.S. dollar by 7% after Trump won the presidential election in the U.S. last November. This week the U.S. president was critical of both Japan and China for taking advantage through the devaluation of each of their currencies.
The accusation was vehemently denied by Japan. A lowering in selling expenses has contributed to a lift in the profit forecast for the full year said Honda in a statement.
The automaker set its earnings forecast for the full year base on a rate of 107 yen per one U.S. dollar, compared to the previous rate before the election of 103 yen per one U.S. dollar.
Honda sold record number of vehicles in 2016 in both China and the U.S. helped by a demand for crossover model Vezel and its new Civic.
The carmaker projects an increase in worldwide sales for its fiscal year that starts during April due to demand in both China and the U.S.
Honda posted net income in the third quarter of more than 168.8 billion yen, which beat estimates made by analysts of 118.5 billion yen.
Shinzo Abe the Prime Minister of Japan is scheduled to hold a meeting next week with Trump in Washington. He pushed back on Trump’s description of the car trade between the U.S. and Japan as being unfair.
A Honda official said on Friday that he hopes the meeting between Abe and Trump would remove some misunderstanding.
Honda manufacturers close to 70% of its vehicles that are sold in the United States in the country, which is the highest ratio of local production next to Ford Motor.
The official said Honda would respond to any and all policy changes with the U.S. under the new president. However, he did not elaborate.
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