Japan has long known that its population would begin to decline one day. But as 2005 comes to a close, the country is being shaken by the news that the population fell by 19,000 this year, which means the decline began sooner than forecast.
Japan changed from a feudal, farming society into a manufacturing powerhouse in less than a century, and then rebuilt after a catastrophic war to become the world's second biggest economy. Now, however, it faces a new economic challenge, which may bring wrenching change.
Its population of 127 million is beginning to decline. The head of the Health Ministry's vital statistics division, Reiji Murayama, says the contraction began this year, two years earlier than expected.
Mr. Murayama says for the first time since the government began keeping records in 1899, this year marks the first time that deaths from natural causes will exceed births.
The number of domestic births has dropped five years in a row, while deaths have been annually increasing for the past five years. That is because so much of the country's population is elderly, and they have a higher death rate than other age groups.
University of Nevada-Las Vegas economist Takashi Yamashita, who studies aging and population, says no country has ever confronted such a trend.
"This is unprecedented. And the speed that Japanese society is aging is also unprecedented. It's not only the magnitude but also the speed of change is so quick.
The looming population implosion has Prime Minister Junichiro Koizumi expressing concern because of fears of what a population slump will do to the economy.
The prime minister says he is worried that the declining birthrate is becoming more conspicuous. Mr. Koizumi says he feels measures are needed to stop the trend.
Although historically, as countries have become wealthier, their birth rates have slowed, for rich countries such as Japan, a birth rate that is too low can lead to slower economic growth. There are fewer families needing new homes and furniture, fewer children who need clothes and toys, and fewer young, energetic workers to make things or provide services.
And at the current pace, Japan's population will drop in half in less than a century. At the same time, the average age will rise. That means there will be fewer young workers to pay taxes and contribute to the social security system needed to support elderly retirees.
Economists say the country also will face a dire shortage of workers in the health and service industries to cater to Japan's gray population.
Some demographers contend immigration is the only way to reverse the trend. But such a suggestion has little political and public support in this ethnically homogenous island nation.
Economics professor Takashi Yamashita is among those who believe Japan will have to open its borders a bit more. He suggests looking to other nations, such as Canada, for a model.
"I really don't know any country that's opened up so quickly within a short period of time," he said. "In some cities in Canada, say Toronto or Vancouver, 40 percent of the population is foreign born. If you can control immigration pretty well, like Canada does, it's possible that Japan can prosper and, essentially, import a lot of skilled workers."
But that is unlikely to happen, so more of the elderly may have to be enticed to delay retirement - to keep factories and offices humming. Japan's women also are likely to be under more pressure - both to have more babies and to take a greater role in the workplace.
Environment Minister Yoriko Koike says Japan should not expect to suddenly see a lot of new mothers.
Ms. Koike says young women in Japan do not see raising children as something pleasurable, so they do not want to have babies.
Surveys consistently find women here complaining about inadequate childcare and lack of support in raising kids from husbands who work long hours. Some local governments have tried to entice young couples to have more children by offering economic incentives, but to little success.
In an acknowledgement of the seriousness of the problem, the prime minister has appointed a member of his cabinet to tackle the declining birthrate and boost gender equality.
Mr. Koizumi gave the post to Kuniko Inoguchi, a distinguished academic and former ambassador.
Ms. Inoguchi calls for drastic changes in Japanese society to defuse the population implosion. She says nothing will change unless the country's leaders and society begin to see things from the viewpoints of young couples and children.
Women here also are frustrated in their attempts to succeed in the workplace. They find themselves generally relegated to secretarial and other low-level posts.
That presents Japanese women with equally daunting choices between a glass ceiling at the workplace or raising children with inadequate assistance from the state and their husbands.