Toyota Motor Corp. on Tuesday raised its group earnings forecast for the current business year through next March, as it banks on the yen's fall and cost-cutting efforts to offset tough competition in its key U.S. market.

Japan's biggest automaker by volume expects a group net profit of 1.95 trillion yen ($17 billion), up from its previous outlook of 1.75 trillion yen.

Group operating profit is now projected at 2 trillion yen, up from 1.85 trillion yen, while its sales forecast was left unchanged at 28.5 trillion yen.

The latest net and operating profit outlooks represent a 6.5 percent and 0.3 percent growth from the last fiscal year respectively.

Under its previous guidance, the carmaker had expected both profits to drop for a second straight year. The company had projected a drop in operating profit for two years in a row for the first time in 18 years.

"The upward revision is largely based on currency moves (rather than our own business)," Executive Vice President Osamu Nagata told a press conference in Tokyo on Tuesday. Without the help of the currency, it may have been difficult to forecast profit growth, he said.

Toyota now expects the U.S. dollar to average 111 yen, compared to its previous estimate of 110 yen, and the euro to average 128 yen against 124 yen. The assumption of the weaker yen alone lifted the operating profit outlook by 65 billion yen.

The carmaker also said that cost reduction efforts and a fall in expenses including depreciation and quality-control costs helped raise its earnings forecast despite its global vehicle sales plan being left unchanged at 10.25 million vehicles.

Nagata said the U.S. market remains tough as the company sees demand shifting to light trucks from passenger cars, the segment where Japanese carmakers are typically strong.

Toyota said that its group net profit rose 13.2 percent from a year earlier to 1.07 trillion yen in the first half that ended Sept. 30, helped by the yen's fall and cost-cutting efforts.

In the six-month period, Toyota posted a group operating profit of 1.1 trillion yen, down 1.8 percent, on sales of 14.19 trillion yen, up 8.6 percent.

Toyota, the maker of the Camry sedan, Prius electric-gasoline hybrid car and Lexus luxury models, boosted global sales to 5.22 million vehicles in the first half from 5.07 million a year earlier.

By region, Toyota sold 1.09 million vehicles in Japan, up from 1.08 million a year earlier.

Sales in Asia excluding Japan totaled 744,000 units, down from 765,000 a year ago, while sales in Europe increased to 469,000 units from 434,000.

Meanwhile, Toyota's vehicle sales in North America fell by 4,000 vehicles to 1.40 million in the six months through September. Operating profit in the region more than halved to 141.1 billion yen from 296.8 billion yen.

Nagata said that profitability has been under pressure amid a glut of used cars which help push down the residual value of new models ranging from compact to high-end vehicles and put pressure on prices.

"The redesigned Camry is pushing down (our) incentives (used to promote sales). We are also boosting our production capacity of some models including the CH-R (small SUV) and the Tacoma (pickup truck) we hope to continue to enhance our profitability for the latter half and next year," Nagata said.

Asked about Suzuki Motor Corp. and Subaru Corp. considering joining the new company set up by Toyota, Mazda Motor Corp. and Denso Corp. to develop electric car technologies, Nagata said the company is open to companies that are willing to cooperate.

"The competition surrounding electric vehicles is severe...we are hoping that all kinds of firms will participate."

Carmakers are currently rushing to develop electric cars to meet stricter global emission regulations. Despite being the leader hybrid car maker, Toyota has been relatively slow in the EV business, but as the market could rapidly expand, the company is beginning to boost its efforts in EV production.