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Honda predicts falling profits

Car-maker Honda has warned it expects net profit to tumble 18.3% this year due to a stronger yen, as it reported a modest 1.3% rise for last year.

Japanese automakers have enjoyed brisk profits in the US market in recent years, helped by firm demand and a weak yen.

However, the US credit crunch and a falling dollar are now weighing on their earning prospects.

Honda, Japan's second largest automaker, forecast annual net earnings of 490 billion yen ($4.7 billion) for the year to next March, down from $600.04 billion in the financial year which ended last month.