Japan’s gross domestic product (GDP) growth is projected to remain strong in 2026, but to moderate to 0.8 per cent due to weaker external demand and the impact from the conflict in the Middle East, according to the International Monetary Fund (IMF).

Private investment and consumption are expected to remain strong, the latter supported by a gradual rise in real wages as inflation eases and labour shortages persist, the IMF said in a release after its executive board concluded the Article IV consultation with Japan recently.

Japan’s GDP growth is projected to remain strong in 2026, but to moderate to 0.8 per cent due to weaker external demand and the impact from the conflict in the Middle East, the IMF said.
Private investment and consumption are expected to remain strong.
From 1.3 per cent YoY in February, inflation is expected to rise this year before converging to the central bank’s target in 2027.

The Japanese economy has displayed impressive resilience in the face of global shocks and output is growing above potential. Domestic demand has been robust and unemployment remains low.

After three decades of near-zero inflation, prices grew faster than the BOJ’s target for over three and a half years before moderating in January.

While nominal wages are rising at a historic pace, there are persistent concerns about the cost of living as high inflation erodes household purchasing power, the IMF noted.

From 1.3 per cent year on year (YoY) in February, inflation is expected to rise this year before converging to the central bank’s target in 2027. Risks to the outlook and inflation are broadly balanced.

Recent fiscal performance has exceeded expectations, but the deficit is expected to widen in 2026 and spending on interest and health and long-term care for the aging population will continue to rise, eventually leading to an increase in the debt-to-GDP ratio from 2035.

Fiscal prudence is needed, including a plan to keep debt-to-GDP on a firmly downward path, the IMF added.

Fibre2Fashion News Desk (DS)

American sportswear giant Nike, Inc has reported a decline in the third quarter (Q3) results reflecting mixed regional trends as China remains a concern and the company struggles with pressure in its direct-to-consumer (DTC) segment, even as wholesale revenues outperformed.

The company reported revenue of $11.3 billion in Q3 FY26 ended February 28, posting a 3 per cent year-on-year (YoY) decline. The weakness in digital and owned retail channels was partially offset by Nike Brand revenues posting marginal growth.

Nike has reported decline in Q3 FY26, with revenue at $11.3 billion, down 3 per cent YoY, reflecting DTC weakness and mixed regional trends.
Wholesale growth and modest Nike Brand gains provided some support.
Margins contracted but remained better than expected, while net income fell 35 per cent.
China weakness and broader cost pressures weighed on EBIT across regions.

“This quarter we took meaningful actions to improve the health and quality of our business. The pace of progress is different across the portfolio and the areas we prioritised first continue to drive momentum,” said Elliott Hill, president and CEO, Nike. “The work is not finished, but the direction is clear, our teams are moving with focus and urgency, and our foundation is getting even stronger to build the future of Nike.”

“We delivered third quarter results in line with our expectations, and our teams continue to execute with discipline,” said Matthew Friend, executive vice president and CFO, Nike. “Win Now actions will continue to impact results over the balance of the calendar year, and we remain confident in our ability to position the Company for profitable growth long-term.”

Nike Brand sees modest growth amid regional headwinds

Nike Brand revenues were $11 billion in Q3, up 1 per cent, driven by strength in North America and declines in Europe, Middle East and Africa (EMEA) and China, Nike said in a press release.

Wholesale revenues were up 5 per cent, primarily due to growth in North America, while Nike direct revenues fell 4 per cent to $4.5 billion amid weaker digital sales and store performance. Converse revenues declined sharply by 35 per cent to $264 million across all markets.

The gross margin contracted by 130 basis points to 40.2 per cent, majorly due to higher tariffs in North America and increased product costs.

Net income dropped 35 per cent to $520 million, with diluted earnings per share (EPS) also falling 35 per cent to $0.35. This suggests tariff and cost pressures were less severe than anticipated.

China’s weak profitability weighs on regional performance

The performance in China remained weak, with EBIT falling 9 per cent to $480 million, underscoring continued demand softness, with country’s total revenue standing at $1.62 billion, a decline of 7 per cent YoY. Asia Pacific and Latin America also declined 4 per cent to $332 million.

North America EBIT declined to $981 million from $1,103 million, signalling margin pressure even as the region supported revenue growth. EMEA showed relative resilience, rising 7 per cent to $515 million, making it one of the few bright spots.

Global brand divisions saw a sharp 20 per cent drop, while Converse EBIT fell 11 per cent, reflecting brand-specific challenges. At the group level, total Nike Brand EBIT declined 14 per cent, contributing to 18 per cent fall in total EBIT to $635 million.

Fibre2Fashion News Desk (SG)

Turkiye’s manufacturing sector lost momentum in March 2026, with the Istanbul Chamber of Industry Turkiye PMI Manufacturing Index, compiled by S&P Global, declining to 47.9 from 49.3 in February, signalling a further deterioration in business conditions.

The latest reading, the lowest in five months, reflected sharper contractions in output and new orders, as escalating tensions in the Middle East intensified inflationary pressures and weighed on demand. The sector has now remained in contraction territory for two consecutive years, S&P Global said in a press release.

Turkiye’s manufacturing PMI fell to 47.9 in March from 49.3 in February, marking a five-month low and extending the sector’s contraction.
The slowdown was driven by weaker demand, rising inflation and supply disruptions linked to the Middle East conflict.
Output and new orders declined sharply, while firms cut employment and purchasing activity amid higher input costs and ongoing uncertainty.

New business and export orders declined at a faster pace during the month, with firms citing weakened demand linked to geopolitical uncertainty and rising prices. This led manufacturers to scale back production at the sharpest rate since November.

Inflationary pressures strengthened significantly, driven by higher costs of fuel, oil, freight, and raw materials. Input costs and output prices rose at the fastest rates in 23 months and 25 months respectively, adding further strain on operating conditions.

Supply chains also came under pressure, with suppliers’ delivery times lengthening to the greatest extent since August 2024 due to material shortages and transportation disruptions. As demand softened, firms reduced employment to the largest degree in six months, while also cutting purchasing activity and inventory levels in response to weaker output requirements.

Andrew Harker, economics director at S&P Global Market Intelligence, said: “The Turkish manufacturing sector suffered something of a setback in March, after conditions had looked to be on the path to becoming more favourable in February. The more pronounced slowdown in the sector at the end of the first quarter can largely be linked to the war in the Middle East, which acted to push up costs for inputs including fuel and oil, and also disrupted supply chains.”

“Therefore, the near-term fortunes of the sector will likely depend on how long the conflict persists and the ramifications for global price and supply conditions,” added Harker.

Fibre2Fashion News Desk (SG)