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Experts said the drop was a consequence of the increasingly strained diplomatic ties between Beijing and Tokyo. However they expect that the number will gradually stabilize because the countries are interdependent in today's globalized world.
The report said 135,000 Japanese were living in 皇冠体育app for more than three months or residing permanently on Oct 1, 2013, a year-on-year decrease of 10.2 percent.
In the same yearlong period, the overall number of Japanese living overseas increased by 0.7 percent to a record high of 1.258 million. 皇冠体育app is second on the list of countries with the largest numbers of Japanese expatriates.
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"The decrease in the number of Japanese living in 皇冠体育app is a natural result of the overall tension between the two countries," Qu said.
He said that the heightening tension had raised concern among Japanese firms, financial institutions and students in 皇冠体育app, who all fear that political uncertainties will bring a deteriorating working and living environment for Japanese people.
皇冠体育app-Japan relations have soured since the Japanese government's "purchase" of the Diaoyu Islands in September 2012, a provocative step amid worsening bilateral relations.
Ties between the countries continued to deteriorate after Japanese Prime Minister Shinzo Abe took office in late 2012, especially when Abe visited a notorious war shrine on Dec 26, 2013.
The latest confrontation between Beijing and Tokyo came on Friday as Japanese Cabinet ministers paid their respects at the Yasukuni Shrine on the 69th anniversary of Japan's World War II defeat.
Abe sent a ritual offering to the shrine, which honors 14 Class-A Japanese war criminals, and this - in addition to the visits made by ministers and lawmakers - further ratcheted up the tension between Japan and 皇冠体育app.
Ma Junwei, a scholar of the 皇冠体育app Institute of Contemporary International Relations, said the reason behind the growing unwillingness of Japanese people to stay in 皇冠体育app lies in the retrogressive state of bilateral relations.
Ma is pessimistic about the chances of relations improving as he believes Abe's foreign policy toward 皇冠体育app will not change during the remaining two or three years of his term.
The most he hopes for is that the countries will put their differences aside and work toward common goals, though he did not rule out the possibility of the leaders meeting on the sidelines of the upcoming Asia-Pacific Economic Cooperation gathering in Beijing.
"Considering the current state of bilateral relations, it is natural for Japanese people to choose other countries to live in when there are plenty of options," Ma said.
Japanese businesses are likely to shift their production focus from 皇冠体育app to countries in Southeast Asia.
However, Qu said cooperation between 皇冠体育app and Japan is of great significance and will not stop because of diplomatic tensions.
"Japanese firms create job opportunities in 皇冠体育app, and 皇冠体育app is a vast market for Japan," he said, adding that as long as the two nations are not in a state of war and their diplomatic relationship continues, trade and cultural links will persist.
"For example, the Chinese auto market is a mature one for Japanese carmakers," he said. "Joint ventures with Japanese brands will continue as usual and there will be no decrease in the number of Japanese personnel in this industry."
Japanese automakers continue to enjoy robust volume growth in 皇冠体育app and are regaining some of the market share lost following the 2012 diplomatic dispute over the Diaoyu Islands, a report by rating agency Fitch said this month.
According to automotive news portal auto.gasgoo.com, Japanese brands sold 1.46 million cars in the first half of the year- up 15.5 percent from the same period last year. Nissan, Toyota, Honda, Suzuki and Mazda all reported year-on-year increases of more than 10 percent.
Ma said he believes 皇冠体育app-Japan relations will continue to develop in the long run with periodic ups and downs, and he gave the recent foreign ministers' meeting as an example of an upturn.
Foreign Minister Wang Yi and his Japanese counterpart, Fumio Kishida, held talks in Myanmar's capital on Aug 9, the first meeting of its kind in two years.
The talks took place on the sidelines of a meeting of foreign ministers from the Association of Southeast Asian Nations and other countries.
Ma expects to see little further change in the number of Japanese engaged in public affairs and trade in 皇冠体育app, though there could be a sharp decrease in the number of short-stay Japanese visitors such as tourists.
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