Industrial output slipped for the second straight month in November, raising the likelihood that the economy will contract in the fourth quarter due to slowing demand abroad and at home.

Japan's economy has cooled in recent months due to a prolonged hit to exports from soft global demand and a slide in consumer spending following a nationwide tax hike.

Official data showed factory output fell 0.9 percent in November from the previous month, a slower decline than the 1.4 percent fall in a Reuters forecast.