It said that the nation's population - which comprised slightly more women than men - ranked ninth in the world and accounted for 2.1% of the global population of 6.06 billion.
The latest census report showed Japan's population stood at 126.92 million, up 1.35 million, or a mere 1.1% from the last such survey five years ago.
The figure is a significant drop from the previous record-low growth in 1995 of 1.6%.
The report raises fears that with a shrinking young workforce, the country will be ill-equipped to support the elderly.
The burgeoning elderly population - which includes those over 65 years - hit a record high at 22 million, or one in six people, in October.
Older mothers
The current census found the number of family members per household had dropped to 2.7 from 2.85 in 1995.
It said that the nation's population - which comprised slightly more women than men - ranked ninth in the world and accounted for 2.1% of the global population of 6.06 billion.
The decline in birth rates has been attributed to the trend of late marriages, as more women focus on their careers.
This results in fewer women giving birth in their 20s - in 1999, the average age of mothers who gave birth to their first child stood at a record high of 27.9 years.
Couples also tend to have fewer children.
Population to shrink
Currently, Sweden and Italy have the most elderly people, with the aged accounting for 17.4% of their populations.
But Japan is set to overtake them, with its population expected to start falling by the year 2004, according to a recent government report.
By the year 2025, one in every three people will be elderly, the report said.
At present, four working people support one elderly person, but soon two working people will have to support one elderly person.
Japan has one of the highest life expectancies in the world, at 74.5 years.