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Japan Tobacco Net Forecast Misses Estimates on Stronger Yen

  • Currency fluctuations erode gains from overseas sales volume
  • Price increase in Japan weighs on local demand for cigarettes

Japan Tobacco Inc., Asia’s largest listed cigarette maker, raised its full-year forecast by less than most analysts expected as a stronger yen eroded the value of overseas sales and price increases undermined domestic demand for cigarettes.

Net income will probably be 409 billion yen ($4 billion) for 2016, the company said in a statement Monday. That compares with the 419 billion yen average of 17 analyst estimates compiled by Bloomberg. The cigarette maker forecast annual profit at 399 billion in May, when it also set a sales target of 2.2 trillion yen. It lowered the sales outlook to 2.12 trillion yen on Monday.

Japan Tobacco, which has raised revenue from outside the country to about 60 percent of the total last year, compared...