The Japanese firm expects net profit in the year to March of 1.7 trillion yen ($15.1bn; Â£12.1bn), compared with a previous forecast of 1.55 trillion yen.
That is despite losing its top-selling carmaker status to Volkswagen in 2016,
Meanwhile, Toyota said it had begun formal talks to work with Suzuki on projects including safety technology.
Analysts said the partnership - which could also involve collaboration on vehicles that were less damaging to the environment - would give Suzuki access to Toyota's technology. Benefits for Toyota are likely to include tapping in to Suzuki's strong market position in India.
The forecast for 2016-17 profits is still below the 2.1 trillion yen profit it recorded a year earlier.
But with Japan's yen weakening against the dollar, it will benefit from sales overseas which are worth more when converted back into the local currency.
Like other Japanese carmakers, Toyota is watching closely for any trade tariffs introduced by the new US administration.
At the moment, only about half of the cars it sells in the country are manufactured locally. Last month, US President Donald Trump criticised it for making vehicles in Mexico to sell over the border.
The US is its biggest market, and it is struggling to meet demand for bigger vehicles such as sport utility vehicles. Lower petrol prices have made such models more affordable to drive.

Bohn, ranked world number 71, had chest pains following the second round and called for a medic.
"He was taken by ambulance to Palm Beach Gardens Medical Center, where tests revealed a mild heart attack," a PGA Tour statement said.
"Jason is resting comfortably and in good spirits," his agent added.
"He is scheduled to have more tests this weekend," Justin Richmond said.
"We know he appreciates the concern from so many people in the PGA Tour family who have reached out."
The PGA Tour statement added Bohn's wife was at "home in Atlanta but his in-laws joined him at the hospital, as did fellow player George McNeill, who said Bohn was in good spirits".
Bohn carded 72 in the second round, which would have seen him make the cut at the PGA National.
Saturday's third round proceeded without Bohn, and finished with Spain's Sergio Garcia and Australia's Adam Scott sharing a commanding four-shot lead over America's Blayne Barber.
Northern Ireland's Rory McIlroy missed the cut for a second year.

Part of a school roof was ripped off at Rhosgadfan near Caernarfon, Gwynedd, while hundreds of homes across Wales experienced power cuts.
The day saw train delays, speed and lane restrictions on major bridges and power cuts for hundreds of homes.
It followed a yellow 'be aware' warning for wind across Wales, which was in force until midnight on Friday.
Friday has been one of the busiest days of the festive season on UK roads as the Christmas getaway combined with the end of the working week.
The highest gusts of wind were recorded on Friday afternoon at Mona on Anglesey.
Irish Ferries cancelled six of its fast sailings between Holyhead and Dublin due to "adverse weather conditions" on the Irish Sea, transferring passengers to their cruise ferry services.
Arriva Trains Wales warned of "speed restrictions and possible delays" for all services between Llandudno Junction to Holyhead due to the winds.
The National Trust also closed Erddig Hall and Chirk Castle in Wrexham due to the expected high winds.
Winds eased into Friday evening, with earlier restrictions on both the A55 Britannia Bridge in north Wales and the M48 Severn Bridge in Monmouthshire lifted.
But a blustery forecast for the Christmas weekend has seen at least one festive event postponed - Rhyl's Boxing Day Dip in the sea in Denbighshire will now go ahead 24 hours later, on Tuesday, 27 December.
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Toyota says its full-year profits will be better than expected thanks to a pick-up in sales and a boost from currency fluctuations.
[NEXT_CONCEPT]
American two-time PGA Tour winner Jason Bohn has suffered a heart attack at the age of 42 during the Honda Classic in Florida.
[NEXT_CONCEPT]
Wales has faced pre-Christmas disruptions after winds of up to 75mph from Storm Barbara swept in on Friday.