UPDATE 2-Japan power output falls again, but decline slows

* Electricity output down on year for 11th straight month

* Drop in power output lowest since December

* Less fuel burnt due to higher nuclear output, weak demand (Adds table and graphics, updates with fuel usage data)

By Osamu Tsukimori and James Topham

TOKYO, July 13 (Reuters) - Japan's power output fell for the 11th straight month in June, although the 5.6 percent annual fall was slower than the breakneck pace of decline seen earlier in the year.

The utilities generated 73.52 billion kilowatt hours of electricity in June, the Federation of Electric Power Companies of Japan said on Monday.

Electricity demand among large manufacturers in particular has taken a hit as the global financial crisis has wrecked export markets and forced them to curb production, leading to Japan's worst recession in decades.

But the pace of decline has slowed with output falling by its lowest amount since December, when it was down by 4.9 percent, and much lower than February, when electricity generation plunged 15.8 percent for its biggest decline on record.

"This is a reflection of the gradual pickup in production activities in the manufacturing sector, which is likely to continue improving throughout the second half of the year," said Osamu Fujisawa, an oil economist at industry consultants FE Associates.