TOKYO (Reuters) - Japanese manufacturing activity shrank in June for the fourth consecutive month, a business survey showed on Friday, as domestic and overseas demand remained stubbornly weak.

The Markit/Nikkei Japan Final Manufacturing Purchasing Managers Index (PMI) edged up to 48.1 in June on a seasonally adjusted basis, versus a preliminary reading of 47.8 and a final reading of 47.7 in May.

But it remained well below the 50 threshold that separates contraction from expansion on a monthly basis, prompting companies to hire fewer workers.

The revised index for new orders was 46.1, higher than a preliminary reading of 45.8 and above 44.7 in the previous month, but still showing five consecutive months of contraction.

Export orders also continued to contract sharply.

"Anecdotal evidence suggests that the recent appreciation of the yen against the dollar led to a reduction in global competitiveness and a fall in exports," a statement released with the survey said.

The yen <JPY=> has risen around 17 percent versus the dollar so far this year, and there are concerns that further yen gains could hurt exports, squeeze corporate earnings and lead companies to cut production.

Japan's government is preparing a fiscal stimulus package for this autumn. Economists say the government faces the urgent task of reviving domestic demand as slow wage growth and worries about the strong yen threaten to hurt sentiment.

((Reporting by Stanley White; Editing by Kim Coghill))