Canon, the Japanese electronics group, reported a 13 per cent drop in second-quarter profit on Thursday as a stronger yen reduced the value of its overseas sales.

The manufacturer of cameras, printers and copiers generates about 80 per cent of revenues outside Japan, leaving it vulnerable to currency swings. The yen hit a 12-year high of Y96 against the dollar in March and was up 15 per cent in the year to June.

Masahiro Osawa, Canon’s managing director, said: “The business environment is harsher than we originally thought.” .

The company has increased sales of its single-lens reflex digital cameras, increasingly popular high-end products that deliver hefty profit margins. Canon is the world’s biggest digital camera maker and, along with Nikon, dominates the market for swappable-lens SLRs.

Sales of office copiers have slowed, however, as the wobbly global economy has forced companies to cut back. Demand in the US, Canon’s biggest office-equipment market, has been particularly hard hit.

The group’s net profit was down 16 per cent for the first half but it stood by its full-year forecast for a ninth year of earnings growth, encouraged by the yen’s retreat from its March peak.

The Japanese currency was trading at about Y107 to the dollar on Thursday.

Canon expects to earn Y500bn ($4.6bn) in the year to December, up 2.4 per cent compared to a year earlier.

Analysts are less bullish, however, with average forecasts pointing to a result closer to Y480bn.

Canon’s shares closed up 3.68 per cent at Y5,360 before Thursday’s announcement.