TOKYO: Tokyo stocks rose Thursday on a weaker yen, with Toyota rebounding as news of a share buyback offset warnings from the auto giant that it is on track for a second straight year of falling profits.

Toyota sank in early trade a day after reporting its first drop in annual net profit and said it expects a similar fall in the next fiscal year owing to expensive US customer incentives and a pick-up in the yen.

But the firm rebounded in the afternoon as traders digested the announcement, also in the earnings report, that it will buy back as much $2.2 billion of its own shares, which tightens their availability. Toyota ended 0.69 percent higher at 6,123 yen.

The bellwether Nikkei 225 rose 0.31 percent, or 61.46 points, to 19,961.55 — close to the key 20,000 level it last crossed in late 2015.

The broader Topix index of all first-section issues gained 0.11 percent, or 1.67 points, to 1,586.86.

Exporters were lifted as the dollar held above 114 yen, having broken above the level on Wednesday for the first time since March. A lower yen boosts exporters’ profitability.

“The yen is weakening as investors once again price in the strength of the US economy, and it’s a tailwind for Japanese shares,” said Juichi Wako, a senior strategist at Nomura Holdings.

Japan’s auto industry is facing uncertainty over Trump’s drive to support US firms over foreign imports, a stance that has raised fears of a global trade war.

He has targeted Toyota with strong criticism of its ongoing project to build a new factory in Mexico, threatening it with painful tariffs.

Nissan reports its annual earnings on Thursday.

Honda last month said its annual net profit jumped nearly 80 percent, largely owing to a drop in costs tied to a massive recall of airbags made by key supplier Takata.

Toyota, which lost its crown last year to Volkswagen as the world’s top-selling automaker, expects a net profit of 1.5 trillion yen in the year to March 2018 — way off market expectations of around 1.9 trillion yen.

Toyota’s latest annual vehicle sales ticked up to 10.25 million units from 10.09 million units.

Demand in North America remained flat, while Toyota registered a sales pick-up in Europe, Japan and the rest of Asia.

Unit sales dropped in Central and South America, Africa and the Middle East.

The company launched an internal restructuring last year to make it leaner and boost profits, but CEO Akio Toyoda said the firm had far to go in overhauling itself.

“The main problem is that Toyota has become too big...Profits are set to decline for two years so we’ve lost twice in a row,” he said.

Hundreds of companies are reporting earnings this week.

“Corporate earnings are respectable. Sales grew due to a recovery in the global economy last year, and few companies are cutting forecasts for this year even when they have a conservative outlook on the yen,” Wako told Bloomberg News.