Can Toyota avoid headwinds buffeting the industry?

Toyota’s Q1 2025/26 results were broadly positive, although the company hinted at some potential areas of concern. For example, while it reported a 9.5% operating margin for the quarter, it expects 5.6% for the financial year as a whole. The key factors are tariff costs in the US and exchange rates moving against Toyota. There is a limit to what companies can do regarding exchange rate movements, other than successfully hedging, and the tariff situation in the US is full of uncertainty.