TOKYO Feb 1 The world's second-biggest auto
parts supplier Denso Corp raised its annual profit
forecast by 6.7 percent to 240 billion yen ($2.6 billion) on
Friday, helped by a weakening yen that also benefits its
Japanese customers including Toyota Motor Corp.
Denso, whose results serve as performance indicators for
automakers, posted an operating profit of 51.7 billion yen for
the October-December quarter, up 3 percent from a year ago and
in line with forecasts.
"Considering the progress of the depreciation of yen, we
have revised the assumed exchange rate and have made an upward
revision to the year-end sales forecasts," Kenichiro Ito, an
executive director of Denso, said in a statement.
Denso shares, which have risen nearly 52 percent since
mid-November, were trading around 3 percent up by 0417 GMT,
outperforming a 0.7 rise in the broader Nikkei index.
The yen weakened about 11 percent versus the dollar between
October and December. Denso changed its average dollar rate
assumption for the business year to March to 81 yen from 80 yen,
and its euro rate to 105 yen from 100 yen.
Denso, 22.5 percent-owned by Toyota, said strong car sales
in North America helped boost profits.
Japan's top three carmakers Toyota, Nissan Motor Co
and Honda Motor Co are expected to benefit from the
yen's depreciation, though Honda's trimming of its net profit
forecast on Thursday suggested this may take some time to come
into full effect.
As a result of the currency move, Denso and other parts
makers are likely to face less pressure from Japanese automakers
to cut prices.
Denso's main rival Robert Bosch of Germany, the
world's biggest auto parts supplier, last year sold its 5
percent stake in the Japanese firm for around 1.1 billion euros.