* Yen hits record high of 77.60, auto shares fall
* Toyota seen hardest hit among top-3 automakers by currency
* Japan electronics firms also face profit drop, but less
* Expectations grow of currency intervention by gov't (Adds detail on yen rise impact on exporters)
By Tim Kelly and Mariko Katsumura
March 17 (Reuters) - Led by Toyota Motor , Japan's auto and electronic device exporters face a fresh crimp on earnings after the yen surged to a record high in the wake of last week's devastating earthquake that has also left many of their factories idle due to a dearth of component supplies.
Should the currency crisis deepen, the damage to profits may overshadow the cost of lost output and the expense of fixing broken machinery.
"Companies can absorb gradual changes no matter what the range, but this sudden change in just one night, and if it continues to the end of March, will be very bad news for exporters including Toyota," said Yuuki Sakurai, the CEO of Fukoku Capital in Tokyo.
Companies didn't know Japan's geographical risk "was going to be so big so I think there will be a gradual shift to overseas and the strong yen gives them another reason to push production overseas," Sakurai said.
The yen reached 77.60 per U.S. dollar on the EBS trading platform , blowing through the April 1995 record of 79.75.
Rating agency Fitch on Wednesday warned that the direction of the yen over the coming three months could weigh heavily on profits at Toyota and at Nissan Motor and Honda Motor .
TOYOTA'S GREATER HOME RELIANCE
Hardest hit will likely be Toyota which relies more on home factories to supply overseas markets than its two nearest rivals.
Toyota spokesman Paul Nolsaco said he was not yet in a position to comment on the impact that the surging Japanese currency will have on the company's income.
Toyota still builds 38 percent of its vehicles in Japan, of which more than half are shipped overseas. A one yen shift against the dollar cuts annual operating profit by about 30 billion yen.
Nissan which makes 24 percent of its vehicles at home gets an 18 billion yen hit. Honda with just 22 percent of production at home is least impacted.
The knock to earnings at Japan's electronics firms is less, but they too will see profits erode as the yen climbs. Both Panasonic Corp and Sony Corp say every one yen move against the dollar will mean 2 billion yen less in operating profit.
Toshiba Corp spokesman Keisuke Ohmori said the Japanese chip maker was unsure how much effect the yen gains will have.
"The movement of the dollar rate is too rapid, so it's difficult to assess," he said.
The hope for Japan's exporters including Toyota, which is keeping its 12 main assembly plants in Japan closed through Tuesday, is that as they repair their facilities, the Japanese government will try and fix the yen.
"Many investors are expecting a joint currency intervention and that the current spike in the yen is speculative," said Teruhisa Ishikawa, equities information manager at Mizuho Investors Securities.
Toyota shares fell 2.2 percent in Tokyo trading with Nissan dipping 1.1 percent and Honda also down 1.1 percent. Panasonic rose 1.2 percent while Sony declined 0.5 percent. Toshiba lost 0.9 percent. The benchmark Nikkei 225 fell 1.4 percent. (Editing by Vinu Pilakkott and Muralikumar Anantharaman)