The falling population of the land of the rising sun has raised concerns about the country's chances of maintaining its economic growth and about the government's ability to finance growing pension requirements.
The estimates, based on preliminary figures of births and deaths registered at municipal offices, showed the number of babies born in 2006 was 1,086,000, 23,000 more than a year earlier.
In 2005, the fertility rate of Japanese women, or the average number of children a woman bears in her lifetime, dropped to 1.26. Health Ministry data showed this trend has reversed and the fertility rate is rising. In 2006, the rate rose to 1.29. All the same, the ministry said the rate was expected to start dropping again this year.
Demographers say a rate of 2.1 is needed to keep a population from decreasing.