TOKYO -- Japanese government incentives for green cars and strong sales in China helped Honda avoid red ink for the first half and raise its full year profit forecast.

Japan's No. 2 automaker said Tuesday it now expects a net profit for the fiscal year ending March of $1.7 billion, nearly four times its initial outlook.

Hit by a strong yen and weak global auto market, net profit for the July-September quarter fell 56.2 percent from a year earlier to $587.0 million but was better than expected. For the first half, the automaker booked a net profit of $668 million compared with its earlier projection for a $109 million loss.