Toyota mulls halting Corolla exports on strong yen: Reports

TOKYO: Japanese auto giant Toyota Motor is considering moving some domestic production of its popular Corolla sedan to factories overseas to counter the impact of the strong yen, reports said Thursday.

Toyota, which in 2009 manufactured 215,000 Corollas in Japan, is mulling the plan as it had been exporting large quantities of the model, Kyodo News reported, citing unnamed company sources.

The Sankei Shimbun newspaper said in its online edition that Toyota is considering moving some production to its plant in Mississippi in the United States.

Toyota spokesman Paul Nolasco told AFP that "no formal decision was made on the transfer of production, although we've always been looking for the best production sites for each of our products."

Japanese firms have indicated that the strong yen may force them to move more production overseas to remain competitive, which would deal a blow to an economy looking to boost growth and maintain a recovery from recession.

A strong yen is problematic for Japanese makers trying to recoup production costs in overseas markets with weaker currencies.

And for every one-yen rise in the currency's value against the dollar, companies can lose tens of billions of yen earned overseas when repatriated, threatening a sector that Japan depends on to offset its weak domestic picture.

The yen has been constantly appreciating against the dollar and the euro in the latter half of this year as investors have fled to the traditional safe haven currency on concerns over the health of the global economy.

The dollar hit a fresh 15-year low against the yen on Thursday, changing hands at 81.12 yen in Asia amid speculation of further US credit easing and rises in Asian currencies on Singapore's surprise monetary tightening.

Japan stepped into currency markets in September for the first time in six years to dampen the yen's rise and has repeatedly threatened to do so again to safeguard an export-led recovery against currency volatility.

Tensions have flared over the issue of currencies, which is set to dominate a Group of 20 summit of the world's top economies in South Korea next month as nations look to curb capital inflows and safeguard exports.