How bright is Japan's economy?

The nation's industrial output in July remained unchanged from June, according to the below-expectation figures.

July's 0% month-on-month figure follows June's 1.3% fall - another sign that Japan's economy could be slowing down.

Analysts had expected a 1% increase for July, and the release of the data helped see the Nikkei drop 1.18% by afternoon trading in Tokyo on Tuesday.

The Japanese government has also recently reported that householder spending fell in July for a third straight month, while last month's jobless rate jumped to 4.9% from 4.6% in June.

'Upward direction'

A spokesman for the Ministry of Economy, Trade and Industry (METI) said it was sticking to its assessment that industrial production remains "in a gradual rising trend", forecasting that output would increase over the next two months.

"Even in the upward trend it is not always possible to attain the increase of output every month," he said.

"In addition, our forecast on output activity over the next two months, based on our survey results, is not bad."

The METI forecasts that industrial output will rise by 1.5% month-on-month in August, and by 0.6% in September.

By product sector, output of steel rose 1.6% in July due to strong demand across Asia; while output of plastic products increased 2.1%, thanks to demand from the auto industry and beverage makers.

But output of electronic devices fell 3.8% month-on-month.