Toyota, Honda brace for impact after Trump auto tariffs, stronger yen

Toyota Motor Corp. and Honda Motor Co. earnings will paint a mixed picture as a stronger yen and US auto tariffs eat into profit, despite resilient unit sales.

Toyota likely saw a dip in first-quarter operating profit, according to estimates.

While the company posted record global sales in the first half driven by a surge in pre-tariff purchases, Bloomberg Intelligence said the automaker is likely weighed down by factors including supply chain costs.

Honda’s profit likely fell for the same reasons, according to BI.

In June, Japanese automakers slashed US export prices by 19%, the biggest drop since records going back to 2016, sacrificing margins to remain competitive through the tariff turmoil.

Japan’s defense sector will also be in focus, as rising government spending will support sales and margin growth at Mitsubishi Heavy Industries Ltd. and Kawasaki Heavy Industries Ltd. 

Tariff-related pressures are expected to weigh on Kawasaki Heavy’s power-sports segment, while its defence unit is projected to drive margin expansion, Jefferies analyst Sho Fukuhara said.

Profit margins at Mitsubishi Heavy’s aircraft, defence and space business could exceed targets, supported by a gradual recovery in Boeing 787 production, BI said. 

Highlights to look out for:

Monday: Mitsubishi UFJ’s (8306 JP) first-quarter net income could exceed 25% of its full-year guidance, BI said. Its fiscal 2026 return-on-equity may also exceed 10%, it added. 

Tuesday: Nippon Yusen’s (9101 JP) operating profit likely dropped 21%, consensus shows. The shipping line’s profit outlook for this fiscal year risks stumbling as the trade war and global economic uncertainty weigh on container spot rates, BI said.

Mitsubishi Heavy’s (7011 JP) business profit likely rose 3.4%, estimates show, helped by the aircraft, defense and space unit’s growth, BI said.

Wednesday: Honda’s (7267 JP) earnings were hurt by higher growth-related expenses, a stronger yen and weaker auto sales in Japan and China, BI said. Easing US tariffs on Japanese imports could offer some relief, with Morningstar expecting profit to improve by 28% in fiscal 2026.

Cathay Pacific’s (293 HK) first-half net income fell 8.6%, based on two estimates. The airline may see its operating margin narrowing as trade uncertainty weighs on freight rates. Rising jet fuel prices pose a risk, though hedging offers a layer of protection, according to a June BI note.

Kawasaki Heavy’s (7012 JP) first-quarter business profit probably rose 65%, consensus shows. Earnings may continue to increase thanks to steady sales and a margin lift from a recovery in air travel and rising defense orders, BI said.

Thursday: Toyota Motor (7203 JP) is expected to show weaker revenue in North America. Citi analysts said the earnings will be even more of a backward-looking snapshot than usual, as Trump’s lowered tariffs on Japanese imports including cars kicks in. 

Sony’s (6758 JP) operating income for its game and network segment is estimated to have jumped 41%, buoyed by popular game titles with a large number of network subscribers, BI said.

DBS’s (DBS SP) earnings have the potential to surprise on the upside from higher wealth fees and trading income, Maybank said. Singapore banks appear less vulnerable to US tariff risk than Southeast Asia rivals, and may even benefit in the long-term from supply chain shifts, BI said.

SoftBank Group (9984 JP) is likely to rebound to a profit this quarter. Investors will be interested in the firm’s borrowing plans, as it might need to raise $10 billion to $30 billion in the near term to fund investments and cover maturing debt even after recent bond sales, BI said.

UOB’s (UOB SP) is expected to announce a S$0.30 ($0.23) special payout, Citi analysts said. The bank’s quick integration of Citigroup’s retail assets in Malaysia, Thailand and Vietnam will boost its deposit base and wealth business, BI said.

Friday: State Bank of India’s (SBIN IN) profit is expected to decline slightly as the effect of RBI rate cuts begins to show. Analysts also expect higher bad-loan provisions. In July, the bank raised $2.9 billion in the country’s largest ever share sale to institutions to support loan growth, strengthen its balance sheet and meet regulatory requirements.