Tokyo - Operating profits of Japan's second-largest carmaker Honda Motor Co are likely to drop sharply owing to the yen's strengthening against the dollar, a newspaper report said Saturday.

The Nikkei business newspaper reported that Honda's operating profits are expected to drop by about 40 per cent to between 550 and 580 billion yen (5.8 to 6.15 billion dollars).

At the beginning of the business year, which runs until March 31, 2009, Honda had projected operative profits of 650 billion yen, but revised it downwards in April to 630 billion yen.

Other Japanese companies are also suffering under the strong yen and the effects of the global economic downturn. Ahead of the peak of Japan's earnings report season next week, investors fear that many companies will revise downwards their earnings projections for the current business year.

Honda is to release its business data for the first six months on Tuesday. Electronic giants Panasonic, Toshiba Corp, Fujitsu, Sharp Electronics and a number of other Japanese companies will also report on their half-year earnings. (dpa)