TOKYO: Toyota Motor Corp reported a surprise quarterly profit and slashed its annual loss forecast by more than half as sales and cost cutting beat its forecasts, putting it on track to follow Japanese rivals into the black next year.

Toyota, the world's biggest carmaker by sales, wrapped up an earnings season dominated by rosier projections from Japanese automakers as they squeeze out savings and boost manufacturing efficiencies to offset the damaging rise in the yen.

The industry has also gotten a sales boost from government-backed incentives from Germany to China and Japan, aimed at igniting demand through the worst economic crisis in generations.