TOKYO (AFX-ASIA) - The Ministry of Economy, Trade and Industry said it cut its industrial production assessment due to the accelerating deterioration seen in July, adding that an expected rebound in August will be short-lived. The ministry downgraded its assessment for the first time since March, saying the data is now indicating a further declining trend. Industrial production in July was down 2.8 pct month-on-month, the fifth consecutive month of declines and the largest fall since January, when output fell 4.4 pct. "The decline from July has become sharper compared with that seen in March," a ministry official said. He added that, while inventories also saw sharp falls in July, the output figures need close attention, given seasonal factors at work. "The decline in (inventories for) July was largely due to falling inventories in air-conditioners," a highly seasonal product, the official noted. Inventories fell 1.4 pct in July, compared with a fall of 0.6 pct the previo us month. Worsening demand for PCS and mobile phones continued to pressure industrial production, along with output adjustments in the microchip sector. For August, the ministry forecast a rise in output of 4.3 pct, led by new product launches in the PC and auto sectors. Electric machinery output, which includes PCs, is expected to rise 7.4 pct and transport equipment 9.1 pct. However, the official said, the gains will be short-lived, as the ministry forecasts output to fall again by 3.0 pct in September due to the higher base the previous month.