TOKYO, May 31 — Japan's industrial output rose less than expected in April and inventories of electronic parts rose, a sign that the economy may be struggling to shake off a first quarter contraction.

Industrial output rose just 0.3 per cent in April from the previous month, official data showed today, well below the median forecast for a 1.2 per cent increase and a 1.4 per cent rise in March.

Much of the slowdown was due to a 5.6 per cent decline in production of electronic parts while inventories rose for a third straight month, adding to fears of weakening overseas demand.

On the positive side, production of cars and machines used in factories accelerated in April.

Manufacturers surveyed by the Ministry of Economy, Trade and Industry expected output to rise 0.3 per cent in May but to fall 0.8 per cent in June.

Japan's economy contracted in the first quarter as weak investment, consumption and exports took their toll, with today's output data and forecasts adding to concerns over how quickly the economy can return to growth. — Reuters