(August 4, 2010) Toyota today raised its full-year profit forecast as sales in Asia are growing more than expected and demand in the U.S. recovers following the recall of more than 11.2 million vehicles globally, according to Bloomberg News.

Toyota may post net income of 340 billion yen ($3.98 billion) in the year ending in March, compared with an earlier estimate of 310 billion yen, it said in a statement today.

For the fiscal first quarter, the company swung to a 190.47 billion yen ($2.22 billion) profit from a year-earlier loss.

The automaker raised its sales outlook for all regions except Europe amid a rebound in demand that prompted rival Honda Motor Co. to also lift its earnings forecast last week.

Sales in Japan, Indonesia and Thailand are helping President Akio Toyoda, grandson of the company's founder, counter the impact of a stronger yen and the lingering effects from the record recall of vehicles for problems related to unintended acceleration.

“Toyota is now at a point where they feel comfortable giving good news,” said Yuuki Sakurai, CEO of Fukoku Capital Management in Tokyo. “The recall issue has settled down in the U.S. and China.”

Toyota's first-quarter sales gained 36 percent in North America, its biggest market. While deliveries fell 3.2 percent in July, the North American market may improve from the third quarter, Toyota's Senior Managing Director Takahiko Ijichi said today.

Toyota's profit in the three months ended June 30 compared with a loss of 78 billion yen a year earlier. Sales rose 27 percent to 4.87 trillion yen from 3.84 trillion yen.

Sales in Asia, particularly in Thailand and Indonesia, “are growing with great momentum,” Ijichi said. Government subsidies for fuel-efficient models in Japan have also made the Prius, the world's best-selling hybrid model, the most popular car in Japan so far this year.

“In Japan, Prius sales are solid because of subsidies,” said Mamoru Kato, a Nagoya, Japan-based analyst at Tokai Tokyo Research Center. “Sales in emerging countries are also doing well.”