The shipping industry is one of the most important in Japan, holding now, as it would seem to have done from time immemorial, a prominent place in the commerce of the country. The reason for this is not far to seek, being found in Japan's insular position, her extensive sea-board, and her mountainous interior. The Japanese take kindly to a seafaring life. During the Middle Ages, they were distinguished among Oriental nations for their spirit of maritime enterprise. Korea, China, Formosa, even the distant Philippine Islands, Cambodia, and Siam saw the Japanese appear on their coasts, now as peaceful traders, now as buccaneers. The story of one of these buccaneers, named Yamada Nagamasa, alias Tenjiku Hachibei, who ended by marrying a Siamese princess and becoming viceroy of the country, reads more like a chapter from the "Arabian Nights" than like sober reality. It is evident, too, that the Japanese of the early part of the seventeenth century were determined not to be left behind in the art of shipbuilding. The English master-mariner Will Adams, who came to Japan in the year 1600, built ships for Ieyasu, the then Shōgun, one of which made voyages to Manila and even to Mexico. Suddenly all was changed. Alarmed beyond measure at the progress of Catholicism, and fearing that in Japan, as elsewhere, the Spanish monk would be followed by the Spanish soldier of fortune, Iemitsu, the third Shōgun of the Tokugawa dynasty, issued an edict in the year 1636, whereby all foreign priests were expelled from the empire, foreign merchants were restricted to the two south-western ports of Nagasaki and Hirado, and all Japanese subjects were forbidden under pain of death to leave Japan. Drastic measures were resorted to in order to enforce the terms of this edict, all vessels of European build and even all large vessels of native build were ordered to be destroyed, only small junks sufficient for coasting purposes being allowed to be retained. This is the style of junk still seen at the present day in Japanese waters. It is distinguished by a single square sail, which is so awkward as to render the vessel difficult to handle except when running before the wind.

Japan's shipping enterprise was crippled for over two centuries, though the number of coasting junks no doubt remained large; for the character of the country made communication by water indispensable.

When the feudal government fell like a card palace, the restrictions on shipbuilding fell with it. The new Imperial government took a laudable interest in the development of a mercantile marine of foreign build. Among other measures adopted with this end in view, a regulation prohibiting the construction of junks of over five hundred koku burthen may be cited as one of the most efficacious. Nor was everything left to official initiative. Iwasaki Yatarō, the celebrated millionaire, started steamers of his own somewhere about 1870; and the company which he worked with the aid of judiciously selected European directors and agents, European captains, and European engineers, soon rose, under the name of the Mitsubishi Mail Steamship Company, to be the most important commercial undertaking in the empire. It even influenced politics; for to the facilities which the Mitsubishi afforded for carrying troops at the time of the Satsuma rebellion, was due in no small measure the triumph of the Imperialists in that their hour of need. Later on, another company, named the Kyōdō Un-yu Kwaisha, was formed to run against the Mitsubishi. But the rivalry between the two proving ruinous, they were amalgamated in 1885, under the name of the Nippon Yūsen Kwaisha, or Japan Mail Steamship Company. This company now ranks as one of the principal steamship companies of the world, and not only trades between the various parts of the coast, but maintains regular services between Japan and Europe, Australia, British India, America, China, Siberia, and the Philippines. The Ōsaka Shōsen Kwaisha is another important private company, owning a large fleet of vessels engaged in the domestic carrying trade and running to Korea, Formosa, and up the Yangtse. The Tōyō Kisen Kwaisha is a third, which runs steamers to San Francisco and Hongkong. A score of smaller companies and numerous privately owned vessels render the means of travel and transit everywhere easy.

Iwasaki's keen enterprising spirit, seconded by government assistance, greatly contributed to develop the country. Places formerly dependent on the casual services of junks found themselves supplied with regular shipping facilities, or were at least able to command tonnage at short notice. Methods, too, rapidly improved. The happy-go-lucky way of conducting the loading of a junk, which could afford to wait an indefinite period for a cargo, necessarily yielded to prompt shipment at the time stipulated. The China war of 1894-5 gave a great impetus to shipping. Many private steamers were engaged as transports, and others bought to supply their place. Then followed laws for the encouragement of navigation and shipbuilding, also the granting of liberal subsidies, with the result that Japanese steamers-as indicated above-now compete with the foreign carriers on the chief lines to and from Japan. The outlay has been considerable for a country which is not rich; yet it may be regarded as a sound investment, because calculated to pay in the long run. It has already succeeded in ousting foreign competition from certain fields, from the Formosa coast, for instance, where British shipping, so late as 1896, amounted to over 86 per cent of the whole steam tonnage entered from abroad, but where the Ōsaka Shōsen Kwaisha now reigns supreme. Great attention, too, has been devoted to the construction of repairing and building-yards and of dry docks.

So far the domestic trade. Japan is no less well-supplied with foreign tonnage, thanks partly to the sudden and enormous increase in the number of tourists visiting these shores. The P. and O. Company, the Messageries Maritimes, and the Norddeutscher Lloyd all run steamers regularly throughout the year to Europe, to say nothing of several regular cargo lines and numerous "tramp" steamers. Across the Pacific Ocean, communication is kept up by the Occidental and Oriental Company and the Pacific Mail running to San Francisco, by the Canadian Pacific Company, whose destination is Vancouver, and by lines to Seattle, Tacoma, and Portland.