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Toyota has followed rival Honda in lifting its annual profit guidance on a lower yen outlook.

For the fiscal year through March 2017, Toyota said it anticipates a net profit of ¥1.7tn ($15.1bn) compared to an earlier forecast of ¥1.55tn. It also raised its full-year revenue target by 1.9 per cent to ¥26.5tn on stronger-than-expected sales of pickup trucks in North America.

The brighter outlook for the Japanese car industry came after the US dollar rose sharply after Donald Trump won the US presidential election in November, boosting hopes for stimulus measures and tax cuts.

The upgrade came even as Toyota suffered a 23 per cent decline in net profit to ¥486.5bn during the fiscal third quarter.

The political outlook for the world’s second largest carmaker after Volkswagen is highly uncertain after Mr Trump threatened Toyota with a border tax for its plan to build a new plant in Mexico, and criticised Japan for what he described as a closed market for US cars.

Akio Toyoda, Toyota’s president, met with Shinzo Abe, the Japanese prime minister, on Friday ahead of Mr Abe’s visit to the US later this week where they are believed to have discussed Mr Trump’s policies.

Earlier in the day, Toyota and smaller rival Suzuki said they will launch formal talks to collaborate in environmental, safety and information technologies as carmakers worldwide turn to alliances to stem the costs of meeting stricter carbon dioxide regulations and developing autonomous driving technology.

The two companies said they were considering an alliance in October, but they had disclosed few details at the time. A Suzuki executive said the company was not rushing to form a capital tie-up with Toyota but did not rule out the possibility in the future.

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