Japan's industrial output rose further in June, confirming that the world's third-largest economy was recovering from a slump triggered by the massive March earthquake and deadly tsunami, although the upswing has lost some of its initial momentum.
The 3.9 percent rise was weaker than economists' median 4.5 percent estimate and marks a slowdown from a 6.2 percent jump in May. Manufacturers expect output growth to slow further in July, although their forecasts topped market estimates, government data showed on Friday. The country's main price gauge rose in June for a third straight month, yet underlying prices and consumption remained sluggish, signalling Tokyo still has a long way to go in its battle with deflation.
Japan's purchasing managers' survey for July showed manufacturing activity picking up to the highest level in five months, but new export orders slipping to a three-month low. The batch of data supports the Bank of Japan's view that the economy is healing faster than initially expected and will start growing later this year, but that a strong yen and US and European debt debacles pose a risk to an export-led recovery.
Manufacturers surveyed by the Ministry of Economy, Trade and Industry expect output to rise 2.2 percent in July and 2.0 percent in August. Core consumer prices, which include oil products but exclude volatile prices of fresh produce and seafood, rose 0.4 percent in June.
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