Credit rating agency Moody's says it has put Toyota's credit rating on review for a possible downgrade. A lower credit rating can make it more expensive for companies or countries to borrow money.
Moody's warned that the car giant's worldwide recalls 'may significantly damage' its brand image and affect its share of important markets.
The news came after Toyota said today that it would recall about 400,000 hybrid vehicles around the world, including its latest Prius model, to fix faulty brakes.
The company is pulling 223,068 hybrid vehicles in Japan and about 147,500 in the US due to a problem with the braking system, in a recall that also extends to Europe and other markets, it announced.
Toyota Ireland said it would recall 58 cars from its third generation Toyota Prius launched in November 2009, but any Prius sold in Ireland before November 2009 is not affected by this recall.
Toyota is now recalling almost 8.7 million vehicles around the world - far more than its entire 2009 global sales of 7.8 million vehicles.
Meanwhile, Toyota's president Akio Toyoda has vowed that the car giant would do 'everything in our power' to regain customer confidence after its mass global safety recalls spread to the Prius hybrid.
'We will tackle the issue with dealers and suppliers,' he said at a press conference, speaking in English. 'Together we will do everything in our power to regain the confidence of our customers,' he added.
