Aug. 17 (Bloomberg) -- Toyota Motor Corp., Honda Motor Co. and Nissan Motor Co., Japan's three largest carmakers, fell on the Tokyo Stock Exchange as the yen was headed for the biggest weekly gain against the dollar since December 2005.

Toyota fell as much as 340 yen, or 5.1 percent, and traded at 6,380 yen as of the 11 a.m. trading break in Tokyo. Honda dropped as much as 6.9 percent and traded at 3,580 yen, while Nissan declined as much as 5.5 percent and traded at 1,076 yen.

Japanese carmakers may fail to meet earnings forecasts for the second half of the fiscal year ending March 31, as a stronger yen against foreign currencies reduces the value of earnings from exports. Toyota, Honda and Nissan get as much as 65 percent of their operating profit from North America, according to analysts.

``Carmakers' earnings may be lower than forecast in the second half'' because of the stronger yen, said Takashi Aoki, who helps manage about 130 billion yen at Mizuho Asset Management Co. in Tokyo. Higher profits due to a weak yen in the first half mean the companies will likely still meet full-year forecasts, he said.

Toyota forecasts net income for the full year will rise 0.4 percent to 1.65 trillion yen ($14.6 billion), assuming an exchange rate of 115 yen to the dollar, compared with 117 yen last fiscal year. Japan's currency traded at an average of about 121 yen to the dollar in the first quarter, ended June 30.

Toyota's annual operating profit falls about 35 billion yen for every 1 yen Japan's currency gains against the dollar, and 6 billion yen for every 1 yen rise against the euro, according to Koji Endo, a senior analyst at Credit Suisse Group in Tokyo.

Denso, Bridgestone

Auto suppliers' shares also fell. Denso Corp., the world's largest listed car-parts maker, declined as much as 260 yen, or 6.1 percent. Bridgestone Corp., the world's largest tiremaker, fell as much as 7.1 percent.

Toyoda Gosei Co., a Toyota affiliate that makes resin and rubber parts for cars, fell as much as 11 percent.

The yen traded at 113.40 against the dollar from 113.89 yesterday, when it touched 112.01, the strongest since June 2006. The yen may rise to 110 against the dollar in a month, said Xinyi Lu, chief strategist of the international treasury division in Tokyo at Mizuho Corporate Bank Ltd.

Japan's currency has rebounded from a record low of 124.13 per dollar on June 22, the weakest since December 2002.

To contact the reporter on this story: Makiko Kitamura in Tokyo at mkitamura1@bloomberg.net.

Last Updated: August 16, 2007 22:44 EDT