Toyota operating profits drop 21.5% as US tariffs take Y1.38tn toll

Toyota reported a 21.5% drop in FY2026 operating income to ¥3.76tn, with a ¥1.38tn hit from US tariffs, higher costs and FX headwinds offsetting stronger sales. Revenue rose 5.5% to ¥50.68tn while net income fell 19.2% to ¥3.84tn; electrified vehicle sales topped 5 million units. Toyota forecast further weakness for FY2027 with operating income guided to ¥3.0tn and sales around ¥51.0tn. The profit decline and downgraded outlook from one of Japan’s largest exporters could be a near-term drag on Japanese equities — notably the Japan 225 index — as tariff-related margin pressure and supplier-cost risks weigh on investor sentiment.