Honda Motor Co will likely post an operating profit of 60 billion yen ($660 million) for the April-September first half, beating its forecast for a loss on cost-cutting and sales of fuel-efficient cars, the Nikkei business daily reported on Thursday.

Honda, Japan's second-largest automaker, has forecast an operating loss of 10 billion yen for the first half.

Honda's first-half sales likely fell 30 percent to 4.1 trillion yen, beating the car maker's forecast for 3.92 trillion yen, the Nikkei said.

Car sales in Japan increased 1 percent in volume terms, helped in part by government tax incentives for fuel-efficient cars. Car sales were also solid in emerging markets, the Nikkei said.

Honda's motorcyle division also performed well, helped by growing demand in India, the Nikkei said.

The car maker's results were also boosted by a weaker-than-expected yen in the July-September quarter, the Nikkei said.

Honda is now expected to record an operating profit of more than 100 billion yen for the full year to March 2010, beating its forecast of 70 billion yen, the Nikkei said.

($1=90.92 Yen) (Reporting by Nathan Layne; editing by Leslie Gevirtz)