Honda Motor Co. on Wednesday raised its full-year net profit outlook to 725 billion yen ($4.9 billion) from the previously projected 710 billion yen, as a greater impact of a weaker yen will offset the impact of its lower sales volume outlook.

The latest net profit project for the year to March 2023 represents a 2.5 percent rise from the previous year when the automaker was also helped by the depreciation of its home currency.

Honda also lifted its sales outlook for the current fiscal year to a record 17.4 trillion yen from its earlier forecast of 16.8 trillion yen.

"We are not boastful (of the record sales forecast) as our global vehicle sales are not record-breaking," Honda Operating Executive Eiji Fujimura said at a press conference. He conceded the upward revisions are due largely to the effect of the yen's slide against the U.S. dollar.

The carmaker revised its assumption for the dollar to 135 yen from 125 yen for this fiscal year. A weaker yen boosts profits earned overseas when repatriated and bolsters the price competitiveness of Japan-made products abroad.

The yen has remained on a downtrend since March, hitting a 32-year low in October on expectations that the interest rate gap between the two countries will widen due to differences in monetary policy between the Federal Reserve and the Bank of Japan.

Honda also raised its operating profit estimate to 870 billion yen from 830 billion yen as the weaker yen outlook alone boosted the guideline by 120 billion yen, which was partly pared by the lower volume projection.

The automaker cut its global vehicle sales plan to 4.10 million vehicles from 4.20 million, reflecting production disruptions from a chip supply crunch and weaker sales in the U.S. market.

The company is cautious about the impact of high inflation in the United States on the economic outlook, Chief Financial Officer Kohei Takeuchi said at the press conference.

High raw material prices also remain a concern, adding pressure on its profitability, but the impact could be less hefty, Takeuchi said.

"We are hopeful that material costs will continue to fall on a gentle downward slope," he said. "However, whether something will become suddenly cheaper will depend on supply and demand."

The motorcycle business fared well, led by robust demand in Asia -- India and Vietnam in particular. Their sales are expected to rise 8.2 percent to 18.4 million units, or 8.2 percent from the previous year.

For the six months ended Sept. 30, Honda reported a 13.0 percent drop in net profit to 338.51 billion yen with sales of 8.09 trillion yen, up 15.7 percent.

Operating profit in the first half edged up 2.5 percent to 453.45 billion yen.

==Kyodo

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