Japan hit by drop in car output

Car production is a key part of the Japanese economy

Japan's industrial output slipped unexpectedly in April, hit by falling demand for cars both at home and in the US, official figures have shown.

April's industrial production fell 0.1% from March, disappointing analysts who had been expecting a rise of 0.5% after March's 0.3% decline.

However, April's output was up 2.3% compared with a year earlier.

The Ministry of Economy, Trade and Industry said the output of small vehicles fell 11% last month.

'Upward trend'

However, seeking to ease concerns over April's dip, the ministry predicted that output would rebound, rising by 1.8% in May and 1.4% in June.

It added that production remained "on a moderately upward trend".

But Norio Miyagawa, an economist at Shinko Research Institute, warned that output could remain weak for a while longer because of slowing demand for cars in the US.

"The data for transport equipment, which cover auto makers, show the effect of the sluggish US economy," he said.