What's going on?

Toyota reported disappointing quarterly results on Tuesday, putting an end to the world�s biggest carmaker�s rousing pandemic performance.

What does this mean?

Toyota handled supply chain hiccups better than most carmakers during the pandemic, and even managed to pull record profit out of the last bumpy financial year. But it looks like chips are its Achilles heel now: chipmakers have prioritized supplying chips for electronics companies, with Toyota�s less-profitable auto chips falling by the wayside. And while the weaker yen gave the Japanese carmaker a leg up when it converted its international profit back into its home currency, exorbitant material costs more than wiped out that benefit.

So at the end of the day (well, the last quarter), Toyota�s operating profit dropped a much worse-than-expected 25% from the same time last year, marking its fourth-straight fall. And while Toyota reported an uptick in its production, the carmaker said that was unsustainable: it slashed this year�s production target from 9.7 million to 9.2 million.

Why should I care?

For markets: Green-eyed investors.
Not even the announcement of a $1-billion buyback program could stop investors from sending Toyota�s stock down after that news. That�s not the end of its worries either: once the eco-friendly drivers� darling thanks to its hybrid models, increasingly green-minded investors have criticized the carmaker�s slow embrace of fully electric vehicles. That could be why Toyota�s considering revamping its $38-billion EV plan after just one year � well, and the fact it had to recall its first mass-produced all-electric vehicle over safety worries this year.

The bigger picture: Low and behold.
The yen fell to a 32-year low against the dollar last month, and Japan�s been trying to buoy it up by buying yen and selling dollars ��all while maintaining its currency-squashing ultra-low interest rates. Data out this week showed Japan spent a record $43 billion on that technique last month, and it can afford to keep that going: Japan holds the world�s second-biggest foreign currency reserves after China.