Toyota Chief Says Yen Has Strengthened Too Much

TOKYO (Reuters) - The head of Toyota Motor Corp (7203.T: Quote, Profile, Research) said on Friday the yen had risen too far against the dollar and that current levels would hurt its earnings.

"The yen has strengthened too much and will have a big impact on us," Toyota President Katsuaki Watanabe told reporters.

After his comments, the yen extended gains to trade just below 102 to the dollar <JPY=>, its highest in more than three years.

The dollar has been weakening on worries that the credit crisis would push the U.S. economy into recession.

Watanabe added that it may be difficult to offset the currency impact with increases in vehicle sales and costs cuts as the yen's rise had been so rapid.

For every one yen that the Japanese currency appreciates, Toyota says its operating profit declines by about 35 billion yen ($340 million).

Watanabe said at the Geneva auto show just four days ago that the yen was making life tougher for the auto maker, but he vowed to take steps to respond. [nMIC374398]

He also said North American vehicle demand for this year looks weaker than the company had estimated late last year, but expects improvement in the second half as the effects of the subprime mortgage crisis dissipated.

(Reporting by Nobuhiro Kubo)