Honda has today announced a 4% fall in profits in the third quarter, despite strong sales in Asia and the US.

Net profits for the three months to 30 September totalled 128 billion yen (£600 million), down from 134 billion yen a year earlier.

The fall was partly due to the 50 billion yen expenses for hedging interest rates and foreign exchange, and that vehicle sales remained robust.

Honda's operating profit for the quarter rose nearly 19%, thanks to a 9.5% rise in overseas sales and the falling value of the yen against the US dollar, which makes its exports more valuable.

Honda said it now expected its global car sales for the 2006/07 business year to reach 3.7 million, slightly less than the 3.72 million it forecast in April.