Japan's Toyota Motor Corp (7203.T) plans to raise its global output target for the year to March 2010 by three percent to 6.5 million units, the Yomiuri newspaper said, in the latest sign of a nascent recovery in auto demand.

Toyota's inventory adjustment has run its course, and sales are picking up due to various government measures around the world to simulate demand for new cars, the paper said on Sunday.

Governments from Tokyo to Berlin and Beijing have offered subsidies and tax incentives to encourage consumers to buy new fuel efficient models to boost their auto industries, hit hard by the global downturn and ensuing sales slump.

The Yomiuri report comes five days after Toyota, the world's largest automaker, trimmed its annual operating loss outlook by 100 billion yen ($1 billion) and edged up its group-based global vehicle sales forecast for the current financial year by 1.5 percent to 6.6 million units.

Toyota officials were not immediately available for comment.

(Reporting by Kiyoshi Takenaka; Editing by Sanjeev Miglani)

Japan Toyota Target