Toyota and other manufacturers are struggling to restore production in the wake of Japan's worst temblor and biggest tsunami ever, forcing them to absorb costs as factories remain idle. Yet for exporters, persistent yen strength could prove more damaging to profits.

"Companies can absorb gradual changes no matter what the range, but this sudden change in just one night, and if it continues to the end of March, will be very bad news for exporters including Toyota," said Yuuki Sakurai, the CEO of Fukoku Capital in Tokyo.

Companies didn't know Japan's geographical risk "was going to be so big so I think there will be a gradual shift to overseas and the strong yen gives them another reason to push production overseas," Sakurai said.

Shares of Toyota were trading 3.1 percent lower at 3,240 yen, with Nissan dipping 2.6 percent to 722 and Honda down 1.6 percent at 3,040 yen. The benchmark Nikkei 225 fell 2.2 percent.

The yen reached 77.60 per US dollar on the EBS trading platform , blowing through the April 1995 record of 79.75.

Rating agency Fitch on Wednesday warned that the direction of the yen over the coming three months could weigh heavily on profits at Toyota and at Nissan Motor and Honda Motor .

As Toyota relies more on home factories to supply overseas markets than its two nearest rivals, the squeeze on its earnings may be more severe.

Toyota spokesman Paul Nolsaco said he was not yet in a position to comment on the impact that the surging Japanese currency will have on the company's income.

Toyota still builds 38 percent of its vehicles in Japan, of which more than half are shipped overseas. Nissan makes 24 percent of its vehicles at home, while for Honda it is just 22 percent.

Toyota, which is keeping its 12 main assembly plants in Japan closed through Tuesday, may be able to restart production soon, said Teruhisa Ishikawa, equities information manager at Mizuho Investors Securities.

"Toyota has manufacturing facilities throughout Japan and seems their production capability has not been severely damaged by the recent earthquake and tsunami," he said.

The hope for Toyota and other exporters is that as they repair their facilities, the Japanese government will try and fix the yen.

"Many investors are expecting a joint currency intervention and that the current spike in the yen is speculative," said Ishikawa.