Securities Report 8/12

Toyota Motor Corporation
24 June 2004


                                   FY2004

                    For the year ended March 31, 2004

20      Derivative financial instruments

Toyota employs derivative financial instruments, including foreign exchange
forward contracts, foreign currency options, interest rate swaps and interest
rate currency swap agreements to manage its exposure to fluctuations in interest
rates and foreign currency exchange rates.  Toyota does not use derivatives for
speculation or trading.

(1)    Fair value hedges

Toyota enters into interest rate swaps, and interest rate currency swap
agreements mainly to convert its fixed-rate debt to variable-rate debt.  Toyota
uses interest rate swap agreements in managing its exposure to interest rate
fluctuations.  Interest rate swap agreements are executed as either an integral
part of specific debt transactions or on a portfolio basis.  Toyota uses
interest rate currency swap agreements to entirely hedge exposure to exchange
rate fluctuations on principal and interest payments for borrowings denominated
in foreign currencies.  Notes and loans payable issued in foreign currencies are
hedged by concurrently executing interest rate currency swap agreements which
involve the exchange of foreign currency principal and interest obligations for
each functional currency obligations at agreed-upon currency exchange and
interest rates.

For the year ended March 31, 2004, Toyota reported gains of 10,413 million yen
related to the ineffective portion of Toyota's fair value hedges which is
included in cost of financing operations in the accompanying consolidated
statements of income.  For fair value hedging relationships, the components of
each derivative's gain or loss are included in the assessment of hedge
effectiveness.

(2)    Undesignated derivative financial instruments

Toyota uses foreign exchange forward contracts, foreign currency options,
interest rate swaps, interest rate currency swap agreements, and interest rate
options, which manage its exposure to foreign currency exchange fluctuation and
interest rate fluctuation from an economic perspective, and which Toyota is
unable or has elected not to apply hedge accounting.  Unrealized gains or losses
on these derivative instruments are reported in cost of financing operations and
foreign exchange gain, net in the accompanying consolidated statement of income
together with realized gains or losses on those derivative instruments.



21      Other financial instruments

Toyota has certain financial instruments, including financial assets and
liabilities and off-balance sheet financial instruments which arose in the
normal course of business.  These financial instruments are executed with
creditworthy financial institutions, and virtually all foreign currency
contracts are denominated in U.S. dollars, euros and other currencies of major
industrialized countries.  Financial instruments involve, to varying degrees,
market risk as instruments are subject to price fluctuations, and elements of
credit risk in the event a counterparty should default. In the unlikely event
the counterparties fail to meet the contractual terms of a foreign currency or
an interest rate instrument, Toyota's risk is limited to the fair value of the
instrument.  Although Toyota may be exposed to losses in the event of non-
performance by counterparties on financial instruments, it does not anticipate
significant losses due to the nature of its counterparties.  Counterparties to
Toyota's financial instruments represent, in general, international financial
institutions.  Additionally, Toyota does not have a significant exposure to any
individual counterparty.  Based on the creditworthiness of these financial
institutions, collateral is generally not required of the counterparties or of
Toyota.  Toyota believes that the overall credit risk related to its financial
instruments is not significant.





                                   FY2004

                                March 31, 2004

The estimated fair values of Toyota's financial instruments, excluding
marketable securities and other securities investments and affiliated companies,
are summarized as follows:


                                                                  Yen in millions
                                                                  March 31, 2004

Asset (Liability)                                                 Carrying                 Estimated
                                                                  amount                   fair value
Cash and cash equivalents                                         1,729,776                1,729,776
Time deposits                                                     68,473                   68,473
Total finance receivables, net                                    5,069,041                5,228,629
Other receivables                                                 396,788                  396,788
Short-term borrowings                                             (2,189,024)              (2,189,024)
Long-term debt including the current portion                      (5,295,756)              (5,387,028)
Foreign exchange forward contracts                                8,923                    8,923
Interest rate and currency swap agreements                        208,141                  208,141
Option contracts purchased                                        8,841                    8,841
Option contracts written                                          (1,725)                  (1,725)



Following are explanatory notes regarding the financial assets and liabilities
other than derivative financial instruments.

(1)    Cash and cash equivalents, time deposits and other receivables

In the normal course of business, substantially all cash and cash equivalents,
time deposits and other receivables are highly liquid and are carried at amounts
which approximate fair value.

(2)    Finance receivables, net

The carrying value of variable rate finance receivables was assumed to
approximate fair value as they were repriced at prevailing market rates at March
31, 2004.  The fair value of fixed rate finance receivables was estimated by
discounting expected cash flows using the rates at which loans of similar credit
quality and maturity would be made as of March 31, 2004.
        
(3)    Short-term borrowings and long-term debt

The fair values of short-term borrowings and total long-term debt including the
current portion were estimated based on the discounted amounts of future cash
flows using Toyota's current incremental borrowing rates for similar
liabilities.





                                   FY2004
     
                     For the year ended March 31, 2004

22      Lease commitments

Toyota leases certain assets under capital lease and operating lease 
arrangements.

An analysis of leased assets under capital leases is as follows:


                                                           Yen in millions
Class of property                                           March 31, 2004
Building                                                       10,937
Machinery and equipment                                        161,446
Less : Accumulated depreciation                                (118,956)
                                                               53,427


Amortization expense under capital leases for the year ended March 31, 2004 was
12,908 million yen.

Future minimum lease payments under capital leases together with the present
value of the net minimum lease payments as of March 31, 2004 are as follows:


                   Years ending March 31:                    Yen in millions

2005                                                              15,662
2006                                                              15,340
2007                                                              14,753
2008                                                              11,036
2009                                                              5,371
Thereafter                                                        24,328
Total minimum lease payments                                      86,490
Less: Amount representing interest                                (9,785)
Present value of net minimum lease payments                       76,705
Less: Current obligations                                         (13,997)
Long-term capital lease obligations                               62,708





                                   FY2004

                      For the year ended March 31, 2004

Rental expense under operating leases for the year ended March 31, 2004 was
81,912 million yen.

The minimum rental payments required under operating leases relating primarily
to land, buildings and equipment having initial or remaining non-cancelable
lease terms in excess of one year at March 31, 2004 are as follows:


                   Years ending March 31:                     Yen in millions

2005                                                              9,304
2006                                                              7,470
2007                                                              5,281
2008                                                              3,680
2009                                                              2,950
Thereafter                                                        12,235
Total minimum future rentals                                      40,920





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