Industrial production rose less than expected in July, signaling that the recovery from the March 11 earthquake and tsunami is losing momentum as the yen gains and overseas demand slows.

Factory output increased 0.6 percent in July from June, the slowest gain since March, the Ministry of Economy, Trade and Industry said Wednesday. The median estimate of 28 economists was for a 1.4 percent gain after a 3.8 percent increase in June.

Prime Minister-elect Yoshihiko Noda faces pressure to reverse three straight quarters of economic contraction just as Europe's debt crisis and elevated U.S. unemployment undermine global confidence and demand.