With the Japanese Yen getting more powerful, both Nissan and Toyota will be cutting back on vehicle production due to the effect of the rising local currency making exports coming from Japan less profitable.

Nissan decided to cut back its domestic capacity by 200,000 units, by stopping the production of the Tiida in Japan, and by suspending one of two production lines at its Oppama plant in Kanagawa Prefecture. The suspended production facility at the Oppama plant is to be transformed into a prototype line.

Meanwhile, production on Nissan's plant in other areas such as China, Brazil, and Russia will be increased to cope for the 15 percent drop in production from Japan.

Toyota on the other hand will gradually cut its production down from 3.9 to 3.1 million units per year by 2014. Toyota has already cut its plant capacity in its subsidiary factory in Shizuoka Prefecture by 100,000 units and is expected to bring down the overall domestic capacity to 3.6 million units for this year.

Both of the Japanese automakers have stated that they will not be laying off any employees.