Toyota has long been the shining example of success within the global car industry, taking market share year after year from primarily the Detroit auto makers. But while Toyota remains in far better shape than the Detroit auto makers, they too are starting to suffering. After being for years one of the most profitable companies, in the world, they now looks set to report an operating loss in the year ending March 2009 And the trend is in fact even worse than this full year number suggests, as they were profitable at the beginning of the year, the loss is even greater at the end of the year, and suggests an even bigger loss next year, unless the situation suddenly improves.There are two reasons for this reversal of fortunes. First, the car industry is one of the most cyclical and as Toyota's gain in market share has ended , meaning that its sales particularly in the U.S. is plummeting.The other reason is the extreme strength of the Japanese yen. While Toyota has moved more and more of its production outside Japan, it is still a large exporter of cars from Japan to the rest of the world. And as the yen is up some 25% against the U.S. dollar this year, and even more against most other currencies. A 1 yen gain against the U.S. dollar will reduce its profit by 40 billion yen ($450 million), meaning that the 23 yen gain against the U.S. dollar this year alone will reduce its profit (increase its losses) by roughly $10 billion. And as Toyota like others use futures and as much of the gain has come lately, we've only seen a small part of the pain for Toyota from this. And add to that the losses from the yen's even greater strength against most other currencies.Toyota is well capitalized so it will be some time before they face the threat of bankruptcy, like GM and Chrysler. But they are certainly heading for big losses in the coming year(s) unless the global slump ends and/or the yen quickly weaken significantly.