Toyota shares closed up nearly 17% on the Tokyo Stock Exchange on Thursday, November 5, after the world’s largest automaker by sales volume raised its operating profit forecast for the current fiscal year by roughly 14.7%. The year ends next March.

Not since 1987 had the stock gained that much in a single session.

Three things drove the revision: growing US demand for hybrid vehicles, the weak yen and careful cost containment. Together they let Toyota absorb falling sales in the Middle East and China.

Toyota by the numbers

Operating profit in the July-to-September quarter of 2026 rose 34% to 1,130 billion yen, about EUR 6.35 billion at the European Central Bank’s November 5 exchange rate (about USD 6.86 billion at 1.08). That is the first year-on-year increase in six quarters, and it beats the 992 billion yen (about EUR 5.6 billion at the European Central Bank’s November 5 exchange rate, about USD 6.05 billion at 1.08) median estimate in the LSEG analyst survey reported by Reuters.

Toyota lifted its full-year operating profit forecast from 3,400 billion to 3,900 billion yen, about EUR 21.9 billion at the European Central Bank’s November 5 exchange rate (about USD 23.65 billion at 1.08). The 500 billion improvement comes alongside a cut to volume expectations. Group retail sales, including those of subsidiaries Daihatsu and Hino, are now expected to reach 10.99 million vehicles instead of the 11.18 million previously estimated.

The North American comeback, driven by hybrids

Behind the numbers sits the success of hybrid powertrains, a segment Toyota leads worldwide. While many manufacturers were pouring engineering effort and money into electric vehicles, the Japanese company set out to make its “dual propulsion” models more efficient. The bet has paid off handsomely.

North America shows it most clearly. Hybrids accounted for more than half of sales in the region in the April-to-June quarter. In the six months from April to September, North America posted an operating profit of 132 billion yen, against a loss of 134.1 billion in the same period a year earlier, when the tariffs imposed by Donald Trump had wiped out the group’s margins in the American market. Price increases and a smaller tariff hit also helped push the region back into profit.

A difficult relationship with the Chinese market

In China, Toyota is struggling to carve out space. The problem is shared by the vast majority of global brands, held back by the aggressiveness of local manufacturers such as BYD and by the extremely rapid spread of full electric cars across the country.

To limit the damage, the company is betting on a new purchasing strategy, outlined at the earnings presentation by executive vice president and chief financial officer Yoichi Miyazaki. For the Chinese market, components and technologies will be selected on competitiveness alone, whatever the supplier’s country of origin or corporate group.

That is a significant change of course for an industrial group raised in the culture of keiretsu, the model built on cross-shareholdings between manufacturers and suppliers (a long-standing Japanese business structure in which companies hold stakes in one another).

The impact of the weak yen

The yen’s weakness also helped push earnings forecasts higher. Over the summer the currency hit its lowest levels against the dollar in 40 years.

For a big exporter like Toyota, a weak home currency can be an advantage, because revenue earned abroad tends to be worth more once converted into yen. Higher import costs can absorb part of the benefit.

Editor’s note

This article was originally published in Italian on money.it by Andrea Fabbri on November 10, 2026 as «Toyota vola del 17% a Tokyo, mai così dal 1987. Ibridi e yen debole spingono le stime». It has been translated and adapted for an international audience by the Money.it International desk.