Honda lowers profit forecast amid China-Japan dispute

<p>Honda has lowered its profit forecast for the financial year as its dispute with China rumbles on.</p>

Shares in Honda closed lower on Friday (October 26th) and it does not look like the carmaker will have an easy ride in trading this week either, as the company lowered its profit forecast for 2012-13.

The organisation made this decision as anti-Japanese business sentiment in China has led to falling sales in the world's second-largest economy, with both Tokyo-headquartered Honda and Toyota reporting poor demand in the Chinese marketplace.

This is due to an ongoing territorial dispute over a clutch of islands in the East China Sea, which has kept the two countries locked in conflict for some time.

Honda's sales in China were down by 40 per cent in September and the carmaker has forecast a net profit of 375 billion yen (£2.9 billion) for the financial year ending on March 31st 2013.

On Friday, Honda closed 2.6 per cent lower on the New York Stock Exchange to $31.58.

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