Japan is trading its way out of its worst recession since the war, but the revival may snag on a strengthening yen, official economists have said.

The country's current account surplus, a broad measure of trade in goods and services, was 90.3% higher in June than a year before, the Ministry of Finance said.

The World Cup, which Japan co-hosted, may have played a part in the rise by encouraging people to stay in country, the ministry said, with foreign travel down 14.3% during the month.

"That has helped reduce the services account deficit," a spokesman said.

Outlook questioned

But, while exports were 8.7% higher, a fall in imports of 4.6% raised concerns of weak consumer demand.

And the Bank of Japan warned that a strengthening of the yen, being encouraged by economic hopes, may take some of the steam out of the revival by making exports more expensive.

On the markets, $1 would buy only 120 yen on Monday, compared with about 135 yen in early February.

"Further destabilisation in the foreign exchange and financial markets at home and abroad could easily exert a negative influence on the economy," the central bank said.

Shinichi Sato, economist Tokyo-Mitsubishi Securities, added: "Exports are beginning to flag, and I expect that and the yen's recent rise to begin to affect the current account toward the end of the year."

Data ignored

Fears of an export slowdown have prompted analysts and investors largely to ignore a series of robust data on Japan's economy in recent weeks.

A report on Friday showed that machinery orders, a measure seen as an early indicator of capital spending, showed their first quarterly rise for a year in the April to June quarter.

But the central bank urged against taking too gloomy a view of Japan's economic outlook.

"Japan's economy, despite persistent weakness in domestic demand and increasing uncertainty regarding the global economy, has almost stabilised as a whole with exports and production continuing to increase," the bank said.