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Toyota ( TM ) cuts annual profit estimate by 16% on tariffs, yen

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Sony ( SONY ), Honda ( HMC ) say tariff hit will be less than feared

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Japan urges Washington to implement car tariff deal

By Daniel Leussink and Sam Nussey

TOKYO, Aug 7 (Reuters) - U.S. President Donald Trump's

tariffs are cleaving Japan Inc, as some big exporters like

Toyota Motor ( TM ) slash their profit forecasts while Sony ( SONY ) and Honda ( HMC )

are among those saying the impact will be less than they had

feared.

As Trump's levies on global shipments into the U.S. kicked

in on Thursday, Japan's top companies offered a mixed picture of

the impact of his signature economic policy and of the stronger

yen on his country's fifth-largest trading partner.

Uncertainty over the tariffs and their erratic

implementation have unnerved companies globally as governments

work feverishly to strike deals and avert a crisis for their big

exporters.

While glimmers of optimism have emerged for Japanese

companies, the outlook remains overshadowed by uncertainty over

when Trump will lower his tariffs on Japanese automobiles and

new questions about duties on pharmaceuticals and

semiconductors.

A Trump broadside on semiconductors, with 100% tariffs on

some chip imports to the U.S., hit Japanese chip supply-chain

firms on Thursday, while shares of companies elsewhere with U.S.

expansion plans jumped.

Tokyo urged Washington on Thursday to swiftly implement last

month's bilateral agreement lowering tariffs on U.S. imports of

Japanese cars to 15% from the 27.5% in total levies in place

since Trump raised tariffs in April.

Two weeks after Trump announced the deal, which he said

included $550 billion in Japanese investment and loans in the

U.S., Tokyo is scrambling to clarify specifics, complicating

business planning for the nation's biggest firms.

'DIFFICULT TO PREDICT'

"It's honestly very difficult for us to predict what will

happen regarding the market environment," Takanori Azuma, head

of finance for Toyota ( TM ), the world's biggest automaker,

said on Thursday.

Toyota ( TM ) cut its operating-profit forecast for the business

year to March by 16% to 3.2 trillion yen ($21.7 billion), citing

the tariffs and the yen.

The company will keep making cars for U.S. customers

regardless of any impact from the tariffs, Azuma told a briefing

on the business results.

"Even at this point, incentives are very low and inventory

is limited, so many customers are waiting. That's true not only

in the U.S., but also in Japan."

Japan's carmakers are among the hardest hit in the trade war

as they resist raising prices, squeezing their profit margins.

In contrast to Toyota ( TM ), Sony ( SONY ) raised its full-year

profit forecast by 4% to 1.33 trillion yen ($9 billion), with

the impact from U.S. tariffs now expected to be 70 billion yen,

down from the 100 billion yen it forecast in May.

Subaru Corp ( FUJHF ) said the tariff impact on its vehicles

has been reduced but remains significant.

MADE IN USA EXEMPTION

Toyota ( TM ) shares fell 1.5%, while Sony ( SONY ) jumped 4.1% and Subaru

rose 2.6%.

Honda ( HMC ) on Wednesday cut its expected tariff impact

by 31% to 450 billion yen but said "there are still many

unknowns".

On chips, Trump offered a big exemption: the 100% tariff

will not apply to companies that manufacture in the U.S. or have

committed to do so.

While Japan is the largest foreign investor in the United

States at $819 billion at the end of 2024, according to U.S.

government data, its chip industry has shied away from making

big U.S. investments.

Shares of Japan chip-making equipment maker Tokyo Electron ( TOELF )

fell 2.7% and chip-testing equipment maker Advantest ( ADTTF )

dropped nearly 1% on Thursday. Chipmakers with big U.S.

expansion plans, however, jumped, with Taiwan's TSMC up 5% and

South Korea's Samsung rising 2.5%.

Japan has said the U.S. agreed not to give it a worse tariff

rate than other countries on semiconductors and pharmaceuticals.

Tokyo ran a bilateral trade surplus of nearly $70 billion

last year on U.S.-Japan trade of nearly $230 billion.

($1 = 147.3100 yen)

($1 = 147.1700 yen)