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Japan's industrial output falls on weak global demand

31 August 2012 Last updated at 11:32 BST

Japan's industrial output unexpectedly dropped in July as a slowdown in global demand hurt exports.

Trade ministry figures showed output was down 1.2% in July, a steep reversal from the 0.4% rise recorded in June and way out of line with analysts expectations of a 1.7% increase.

Arjuna Mahendran from HSBC Private bank said the most "alarming" part was the decline in exports from Japan to Europe, as a slowdown in the latter hurt demand.

"That is really of concern because it means this manufacturing slowdown [in Japan], negative growth in the industrial sector, will continue for some time," he said.