Industrial production in Japan slipped 0.1 percent in May from a month earlier, marking the first decrease in three months, the Ministry of Economy, Trade and Industry (METI) said in a preliminary report Tuesday.

The decline follows a sharp rise in April from a month earlier of a revised 1.2 percent and METI said that industrial production in Japan continues to show as "upward movement," as inventory ratio still posted positive figures and industrial output rose on year by 20.2 percent.

The ministry said that production of transport equipment, paper products, petroleum and coal products, were responsible for the decline in the recording month, in that order

Regarding the output of commodities that mainly contributed to the decrease, large passenger cars, semiconductor products machinery and production of flat-panel display products led to the decline in May, METI said.

Although shipments in the recording month were down a seasonally adjusted 1.7 percent from a month earlier at 96.4 against the 2005 base of 100, inventory rose 2.0 percent to 96.5 and inventory ratio by 4.4 percent to 108.1 against the 2005 base of 100, the ministry said.

On year shipments rose 21.0 percent in May, marking the first on-year rise for the first time in three months, whilst inventory declined 0.8 percent on year in May.

Japan's economic pickup has been gaining traction over recent months as robust overseas demand for Japan-made products particularly from Asia boosted Japanese industrial production, the Cabinet Office said in a recent statement.

Analysts maintained that Tuesday's data, compared to a year ago, confirms Japan's output remains on an uptrend due to solid exports to the U.S. and Asia in particular a strengthening economy in China, Japan's largest trading partner, has aided Japan's overall production rebound on a large increase in demand from China for Japanese products.

According to METI's Survey of Production Forecast in Manufacturing, production is expected to increase by 0.4 percent in June and to increase by a further 1.0 percent in July, the ministry said.