Tokyo - Japan's industrial output in August logged a 3.5-per cent fall, the first in two months, the government said Tuesday.

It is the sharpest fall since the index logged a 4.3-per-cent decline in January 2001 under the current statistical format, the Ministry of Economy, Trade and Industry said in a preliminary report.

The fall was significantly lower than predicted by analysts, who expected a 2.4-per-cent decline and also lower than a
1.3-per-cent rise in July.

August's weak output was due to slow demand of Japanese automobiles, machinery and steel products overseas, the ministry said.

The ministry expected the output from manufacturers to grow 1.6 per cent in September and to edge down 0.1 per cent in October.

The nation's industrial output "remains at weak levels," the ministry said of its overall assessment.

Japan's manufacturing production was expected to continue shrinking, making it the third consecutive quarterly fall in the July-September period. (dpa)