Japan's population grew only 0.05 percent in the year to October 1, its slowest increase in 54 years, underscoring concerns that an ageing population may dent future growth in the world's second-largest economy. Japan's population totalled an estimated 127,687,000 as of October 1, 2004, according to a Ministry of Internal Affairs and Communications' report, Kyodo news agency said on Monday. The government began collecting the data in 1950.

The ageing population has raised concerns about the sustainability of Japan's pension system. The government is trying to reform the pension system by cutting benefits and raising the contribution rate for individuals.

It has said it will increase its own contributions, though it is struggling to find the money to do so.

The data showed that Japan's male population logged the first yearly decline - by 0.01 percent - to 62.30 million, due to a rise in the number of men posted overseas for long-term business assignments, Kyodo said.

Japan's female population increased by 0.12 percent to 65.39 million.

People aged 65 or older accounted for 19.5 percent of the total population, up 0.5 percentage point, the highest ever percentage for this age group, Kyodo said. More than a quarter of all Japanese will be aged 65 or over by 2025. Men can now expect to live for 78 years, while the life expectancy for women is 85. The birth rate is at a record low of 1.38 children.

Copyright Reuters, 2005