The market had expected industrial production to slip 2.8 percent in the month, according to a survey of economists by Dow Jones Newswires reported by AFP.
The fall comes amid growing fears about the fiscal situation in Europe — a major market for Japanese products — and a strong yen hurting the recovery in Japan, the world’s third-largest economy.
A survey of manufacturers released with the data showed that companies expect output to rise 2.7 percent in June and 2.4 percent in July.
Japanese industry is facing major challenges after the country shut down its nuclear reactors in the wake of last year’s atomic crisis, with industry being asked to make deep cuts in energy use.
All 50 of Japan’s nuclear power stations have been switched off after the March 11 tsunami, which swamped reactors at the Fukushima Daiichi plant and sent them into meltdown.
But the government has approved a plan to restart two reactors despite widespread anti-nuclear sentiment.