The preliminary estimates by the Ministry of Economy, Trade and Industry (METI) showed Tuesday that the industrial production in Japan fell 1.5 percent m-o-m in July. Economists had forecast a drop of 2.5 percent m-o-m after a 6.5 percent m-o-m surge in June

The main contributors to the July decrease were lower production in such industries as motor vehicles, electrical machinery & Information & communication electronics equipment, and inorganic & organic chemicals. On the contrary, production machinery, pulp, paper & paper products, and electronic parts & devices had a positive impact on the reading.

In y-o-y terms, Japan’s industrial output jumped 11.6 percent in July after a 23.0 percent climb in June.

The METI also said that shipments dropped 0.6 percent m-o-m, but surged 10.8 y-o-y in July, while inventories decreased 0.6 percent m-o-m and 4.3 percent y-o-y.

According to the survey of production forecast, industrial production is projected to increase 3.4 percent m-o-m in August and 1.0 percent m-o-m in September.