Biggest Cities in Japan for Investment : Their Strengths
Japan is one of the world’s largest economies and a key destination and source country for foreign direct investment. Its cities each have their own industrial strengths, and in order – from the largest first – the ten biggest cities in Japan are Tokyo, Yokohama, Osaka, Nagoya, Sapporo, Fukuoka, Kawasaki, Kobe, Kyoto and Saitama. Here we profile each of them and look at the sectors in which they excel.
1. Tokyo
Population: 9.74 million
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Tokyo is Japan’s capital city, lying on the Pacific coast of Honshu, the country’s largest island. The city is one of the most important in the world economically, and it is also one of the largest. Its metropolitan population, at 37.5 million, is larger than any other city. Tokyo, then called Edo, was built around the fishing industry in the 1600s and 1700s before becoming an important political centre in Japan in the 1800s. It replaced Kyoto as capital in 1868. It remains the home of the country’s national government as well as the Emperor of Japan. Since the Second World War, Tokyo has led Japan’s economic recovery, becoming a key global hub for business and finance. Indeed, the city hosts the headquarters of 37 of the Fortune Global 500 companies, including Sony, Hitachi, Canon, Rakuten and Casio. Meanwhile, the Tokyo Stock Exchange is the third largest in the world by market capitalisation. Other key industries in Tokyo are forestry/timber, tourism, fisheries, retail and logistics. The city has a strong global reputation for research and development, with its many universities – among them the renowned University of Tokyo – producing thousands of graduates every year.
2. Yokohama
Population: 3.78 million
Yokohama also kits on the Pacific coast of Honshu, about 29km from Tokyo. It is considered part of the Greater Tokyo Area, which has a population of approximately 37.5 million. Yokohama was one of the first Japanese cities to start trading with the West in the 19th century, and as such has a reputation for offering a cosmopolitan lifestyle. Its port remains one of the busiest in Japan and one of the most important in east Asia. In 2022, Yokohama’s economy has numerous strengths, among them biotechnology, semiconductors, shipping and various high-tech industries. Among the major companies headquartered in Yokohama are Nissan, JVCKenwood and Isuzu. The city hosts 16 universities, among them Yokohama National University, and has almost 100,000 active higher education students.
3. Osaka
Population: 2.75 million
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By GlobalDataOsaka is yet another major Japanese city on the island of Honshu, although unlike Tokyo and Yokohama, it lies on the northern coast facing the Sea of Japan. It is located about 500km from the capital. Osaka has long been a key city for the financial sector, and in the 2020s it remains highly significant in this field, hosting the Osaka Exchange. Major companies headquartered in the city include Sharp, Panasonic and Sanyo. Osaka has a reputation for being one of east Asia’s most multicultural cities and has a significant student population. Indeed, its universities, such as Osaka University, Osaka Metropolitan University and Kansai University, are highly regarded internationally. Other industries that make a notable contribution to Osaka’s economy are tourism, commerce/retail, media/entertainment, food, electronics, pharmaceuticals, machinery, chemicals and construction. Its metropolitan population is 19.3 million.
4. Nagoya
Population: 2.33 million
Nagoya is also located on the island of Honshu, on its Pacific coast. The city was built around its port, which remains a key contributor to its economy, although in Japan’s post-war recovery it became a key location for industry and transport. Arguably the most important industry in Nagoya is automotives, with the city hosting many of Toyota’s key operations. Aviation, ceramics, events, technology, retail, shipbuilding, chemicals, tourism, education and food are other key sectors in Nagoya, which hosts the headquarters of major companies such as Brother Industries and Ibanez. Nagoya’s metropolitan population is 10.2 million.
5. Sapporo
Population: 1.98 million
Sapporo is the largest city on Japan’s northernmost island of Hokkaido, and is its cultural, economic and political centre. The city’s cold climate saw it host the Winter Olympics in 1972, and its winter sports scene (and the Sapporo Snow Festival) continues to attract tourists to this day. Away from tourism, Sapporo’s economy is based around IT, retail, steel, machinery, beverages, pulp and paper and manufacturing. Its metropolitan population is just under two million.
6. Fukuoka
Population: 1.61 million
Fukuoka is another major port city in Japan, although this time based on the southern island of Kyushu. Being the island’s largest city, it is also its economic and cultural centre, and while much of its industry is reliant on its busy port, Fukuoka has many other industrial strengths. It has a strong reputation in Japan for being a ‘start-up city’ due to its favourable tax regime and start-up visa. Fukuoka is also reliant on the services, logistics, IT and high-tech manufacturing sectors. Key companies based in the city include Iwataya and Kyushu Electric Power. Its metropolitan population is 2.56 million.
7. Kawasaki
Population: 1.54 million
Kawasaki is located on the island of Honshu, about 18km from Tokyo. It is considered part of the Greater Tokyo Area and therefore is part of a region that has a metropolitan population of 37.5 million. Its economy is based around both high-tech and heavy industries, playing host to operations from companies such as JFE Group, Fujitsu, NEC Corporation and Toshiba. Kawasaki is host to many temples, shrines, museums and galleries, which bring in a steady stream of tourists.
8. Kobe
Population: 1.53 million
Kobe is another port city on the island of Honshu, this time on its south-western coast. It is located about 30km west of Osaka. Much of its port was damaged in a 1995 earthquake, but it remains a key container port within Japan. Kobe is perhaps best known globally for the beef that bears its name, but beyond agriculture the city has myriad industrial strengths. It is a key manufacturing hub in Japan, specialising in small appliances, food products, transportation equipment and communication equipment. It also hosts the headquarters of companies such as ASICS, Kawasaki Heavy Industries, Mitsubishi Motors and Kobe Steel. Its metropolitan population is 2.42 million.
9. Kyoto
Population: 1.46 million
Kyoto was Japan’s capital city until it was replaced by its anagrammatic successor, Tokyo, in 1868. It is located in the southern part of the island of Honshu, close to Kobe and Osaka. Kyoto has a rich history, is recognised as a World Heritage Site by Unesco and is considered to be the must culturally important city in Japan. As such, tourism and related activities make up a large part of its economy. It is also a key educational hub in Japan. Industrially, Kyoto is built around sectors such as IT, electronics and beverages. Among the companies headquartered in Kyoto are Nintendo, Intelligent Systems, Screen Holdings and Omron. Its metropolitan population is 3.78 million.
10. Saitama
Population: 1.32 million
Saitama, in the Greater Tokyo Area on Honshu island, incorporates the former cities of Urawa, Ōmiya, Yono and Iwatsuki. It sits about 20km north of Tokyo and shares a metropolitan population of around 37.5 million. Its economy is based around commerce and manufacturing, particularly automotives, food and pharmaceuticals.
All population figures are taken from Japan’s 2020 census.
