Japan Rethinks Immigration Amid Labor Shortage and Foreign Population Rise

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Amid persistent labor shortages driven by Japan's declining birthrate and aging population, the government has moved to expand the intake of foreign workers.

Currently, the specified skilled worker category is the only residence status with a fixed acceptance quota, which has been significantly expanded in response to requests from industries struggling to secure personnel.

As of June 2025, the number of foreign residents in Japan, excluding short-term visitors, reached a record high of 3,956,619. This has drawn renewed attention to the country's future immigration policies.

Higher Caps, Broader Sectors

The specified skilled worker status, introduced in 2019 to tackle labour shortages, is divided into two categories.

Type 1 allows foreign nationals to work in sectors such as agriculture, construction, and hospitality for up to five years. Type 2, designated for occupations requiring advanced skills, permits workers to bring their spouses and children, effectively paving the way for permanent residency.

In March, the government approved a plan to raise the cap on foreign workers accepted under the program up to 820,000 over the five years beginning in fiscal 2024 – more than double the previous limit.

An expert panel within the Immigration Services Agency (ISA) is considering broadening the scope of eligible industries. A proposal has been submitted to increase the current 16 designated sectors to 19, adding fields such as logistics and warehousing.

Surging Skilled Workers

According to the ISA, the number of specified skilled workers in Japan reached a record high of about 336,000 as of the end of June 2025, including roughly 3,000 under the Type 2 category.

This marks an increase of more than 50,000 from the end of 2024.

While the total remains below the approximately 930,000 permanent residents and 435,000 international students in Japan, it represents the fastest growth among all residency categories.

Meanwhile, as of October 2024, over 470,000 foreign nationals were in Japan under the technical intern training program, which accepts unskilled workers.

The program, however, has faced criticism over cases of trainees abandoning their jobs and disappearing after becoming dissatisfied with poor working conditions.

Toward a New Framework

To that end, the government has decided to abolish the current system and introduce a new framework called the specified skilled worker system.

Under this new system, set to launch in April 2027, participants will be encouraged to transition to the specified skilled worker status after working for up to three years.

The most recent related development came in August, when then–Justice Minister Keisuke Suzuki established a project team within the immigration agency to study Japan's medium- to long-term approach to accepting foreign nationals.

With projections that foreign residents could eventually account for more than 10% of Japan's population, the team is also examining whether to introduce an overall cap beyond the specified skilled worker program and assess potential implications for public safety.

Author: Kota Kuwahata, The Sankei Shimbun

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