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Because over 70% of the country is mountainous and difficult to build on. Many mountainous areas the soil is unstable and prone to slips.

Furthermore, most of the urban population is in Tokyo because it is both the nation's capital AND it its commercial center. This arises from the historical requirement by generations of Shogun that regional families maintain a household in Tokyo.

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Q: Why is population in Japan in only a small part of Japan?
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