Japan's industrial production fell a seasonally adjusted 1 percent in January from December in reaction to a pickup in the preceding month, the Ministry of Economy, Trade and Industry said Thursday.

The index of output at mines and factories registered 91.5 against the 1995 base of 100, the ministry said in a preliminary report.

The index of industrial shipments fell 0.6 percent to 94.3, also in reaction to a rise in December, and the index of industrial inventories dipped 1.1 percent to 93.1, down for the fifth straight month to the lowest level under the 1995 base, it said.

Progress in inventory adjustments was also reflected in the 3.3 percent year-on-year drop in the inventory index, down for the third straight month. It fell by the largest margin since the 4.2 percent drop in February 2000 in the information-technology boom.

The ratio of inventories to shipments dropped 4.8 percent month-to-month to 109.0, after a slight gain in December. The index fell to a level not seen since last March.

METI maintained its assessment that output is still on the decline because of severe conditions in a wide range of industries and the tendency for output to stop short of predictions.

The ministry expects industrial production to rise 4.7 percent in February and drop 0.9 percent in March.

In the previous month, METI predicted that output would rise in January, but the result was weaker than expected for the third month in a row, the official said.

Output of electric machinery slipped 1.5 percent in the reporting month, after a December boost on yearend computer demand from the public sector. Production was put off for some IT devices and it is projected to gain 4.9 percent in February, also due to the planned launch of new communications device models, he said.

January production also fell for semiconductor-producing and other general machinery by 2.5 percent, and shipments fell 5.1 percent in reaction to temporary demands in December.

Output of cars and other transportation equipment edged down 0.7 percent, but shipments rose 2.3 percent and inventories gained 10.2 percent thanks to brisk exports to North America. Production is projected to climb 4.5 percent in February.

Output soared 50.9 percent for personal computers because of plans to market new models in the spring, the official said.