TOKYO — Mazda now expects about half the red ink it previously forecast for the fiscal year, crediting a rise in demand from "green" car incentives around the world.

Mazda on Monday revised its forecast for the fiscal year through March 2010 to a $289.5 million net loss — about half the $556.8 million loss that Japan's No. 4 automaker had projected in May.

Also Monday, Mazda said it will issue new common stock later this month that will reduce former U.S. alliance partner Ford's stake to 11 percent from 13.8 percent. Mazda said it will issue up to 460 million shares from Oct. 14 to Oct. 20.

In forecasting a smaller loss, Mazda said global sales for the fiscal year were expected to be stronger by 55,000 vehicles, rising to 1.155 million, from the earlier forecast of 1.1 million, helped by strong sales of the its high mileage Mazda3, called Axela in Japan.