Japan faces population decline and labor shortages

Japan is facing significant demographic challenges as various prefectures report population declines. In 2025, Tokyo saw a 0.2% decrease as residents moved to more affordable suburban areas. Aichi Prefecture experienced a 0.4% decline linked to industrial downsizing and automation, while Osaka saw a 0.5% drop due to high housing costs. Fukuoka also reported a 0.6% decline, reflecting a trend of urban centers losing residents to rural regions.

In response to extreme aging and labor shortages, the village of Nanmoku in Gunma Prefecture has signed a sister-city agreement with Belen, Peru. With 65.2% of its residents aged 65 or older, Nanmoku faces a critical shortage of essential workers, including care workers and bus drivers. Mayor Saijo Hasegawa stated, “We need people from overseas if we are to survive,” as the municipality seeks to attract young people through cultural exchange to prevent community collapse.