Bloomberg reported that Japan's industrial production fell in July 2010, reversing an initial estimate that showed output rose.

The Trade Ministry said that factory output fell by 0.2% MoM from a month earlier as compared with the previously reported 0.3% gain. Production fell 1.1% in June 2010.

The report underscores the threat Japan's export led recovery is under from cooling global demand and the yen’s climb to a 15 year high against the dollar. The Bank of Japan last month bolstered a credit program and Prime Minister Naoto Kan pledged fresh stimulus to help protect the economy, which is also struggling with falling prices that are weighing on growth.

Mr Susumu Kato, chief economist for Japan in Tokyo at Credit Agricole CIB and CLSA, said that "Companies are becoming more cautious about the outlook for the economy as the yen remains on the rise and the global economy is slowing. There's also little incentive for them to pile up inventories amid deflation."

Makers of chemicals, iron, steel and transport equipment contributed to the decline in production.

(Sourced from www.bloomberg.net)