(Reuters) -- Japanese industrial output rose in April at a slower pace than expected, in a discouraging sign that China's slowing economy and Europe's sovereign debt crisis will weigh on Japan's recovery.

The 0.2 percent increase in industrial output was less than the median estimate for a 0.5 percent increase, trade ministry data showed, as some manufacturers curbed production due to an increase in inventories.

Manufacturers said they expect output to decline in May and rebound in June, but economists said the risks from Europe's debt crisis and a rising yen are reason to be cautious about the pace of Japan's economic recovery.

Growth was weaker than expected, reflecting sluggish demand for IT-related goods worldwide, particularly in China, said Takeshi Minami, chief economist at Norinchukin Research Institute in Tokyo.

The forecast for May is worrisome as that would mean production would fall to levels seen last summer, and the expected rebound in June is also weak. All of this stems from a poor export environment.

Manufacturers surveyed by the ministry expect output to fall 3.2 percent in May and then increase 2.4 percent in June, the data showed.

Japan's economy is headed for a moderate recovery as rebuilding from a record earthquake in March 2011 gets into full swing, and government subsidies for low-emission vehicles support demand for automobiles.

But slowing growth in China, Europe's debt crisis and the persistent strength of the yen are clouding the outlook for the export-reliant economy.

The Bank of Japan stands ready to ease monetary policy again should a disorderly Greek exit from the euro shock markets and trigger a spike in the safe-haven yen. Otherwise, the central bank is expected to stand pat for now after having eased policy in February and April.

(Editing by Chris Gallagher)

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