The initial estimate of Japan’s[B] Industrial Production [/B]showed that output added 1.9% in July from the previous month, more than economists expected but the least in four months. In annual terms, the pace of decline moderated to -22.9%, the slowest rate of contraction since December 2008. Output has rebounded over recent months firms replenished inventories that were depleted after sagging overseas demand for Japanese cars and electronics prompted sharp cuts in production as the global crisis reached a boiling point last year. Indeed, the [B]Nomura/JMMA [/B]PMI gauge printed at 53.6 in August, showing that the manufacturing sector expanded for the second consecutive month. However, a sustainable upturn will have to come with growth in underlying demand, which is arguably destined to remain sluggish for some time. Indeed, the International Monetary Fund (IMF) said its latest world economic outlook that global trade volumes are likely to rebound just 1% having shed a whopping -12.2% in 2009.