Japan's two largest automakers, Toyota and Honda, have predicted another strong year of sales overseas, despite the recent rise in value of the yen.

Toyota, the country's number one motor group, lifted its 2002 global sales target by 3.3% with stronger sales expected in Europe, Asia and the US.

Meanwhile, Honda posted record results for the three months to June, helped in part by a weaker yen and strong North American sales.

A weaker yen makes Japanese exports more competitive on price and can boost the value of profits gained outside the country.

However, while the yen has strengthened against the dollar in recent weeks, both groups denied they were concerned.

Higher forecast

Toyota said it now expects to sell 6.19 million vehicles in the current year, which is 200,000 more than it had originally predicted and 4.4% higher than a year ago.

Honda, which reported profits up 20.4% for the first quarter of the year to 107.6bn yen (£576m) , kept its annual forecasts unchanged but some analysts predicted it would now comfortably meet and possibly beat the targets.

Falling domestic demand

The companies acknowledged that while overseas sales were strong, the Japanese market was slowing.

Toyota said on Monday it would consider changes to its domestic production facilities because of sluggish orders.

The company's new vehicle sales in Japan fell 6.9% from a year earlier in the first half to June, according to the Japan Automobile Dealers' Association.

In June, Honda announced a new business plan, which planned new investments in China, Taiwan, the Philippines and Indonesia to reduce the emphasis on cars produced in Japan.