Honda’s quarterly profit surged 36 per cent as Japanese automakers bounced back from last year’s tsunami disaster in north-eastern Japan, but the company lowered its annual forecasts on Monday because of a sales plunge in China.

But the Tokyo-based manufacturer of the Accord sedan, Fit compact and Asimo humanoid robot lowered its forecasts for the business year through March 2013. It cited the recent sales drop in China sparked by a territorial dispute that has set off violent protests in parts of China and a call to boycott Japanese goods.

It now expects to sell 4.1 million vehicles in the year through March 2013, down about 180,000 from the earlier projection to sell 4.3 million vehicles.

Still, that number is an improvement of more than a million vehicles over the 3.1 million Honda sold globally in the previous disaster-struck year.

The negative effect of an unfavorable currency is also expected to weigh, Honda said. A strong yen hurts the earnings of Japanese exporters such as Honda. The dollar did not change that much against the yen in the second quarter, but the yen surged against the euro.

The company lowered its full year sales forecast to 9.8 trillion yen ($122 billion) from 10.3 trillion yen ($129 billion). Compared with the previous year, sales are now forecast to rise 23 per cent.

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