Japan does allow immigration (for fact). For IIRC, I think they have fairly heavy restrictions on it. While their workforce is aging, they also have a problem with overpopulation, and definitely racism plays a role.
The major problem, is 5.5, which essentially forbids double citizenship. This is the single reason why so few people are naturalized. (In 2004, 16,336 people were naturalized, the vast majority from Korea and China – however, only 148 applications were rejected.)
There are few advantages to gaining citizenship versus having permanent residency status: right to vote, and no need for “re-entry permits” when going abroad. Of course some may see the right to vote as important, but in practice most people don’t feel it’s worth losing their first citizenship for it. The guidelines for gaining permanent residency are similar to those for citizenship.
Depends what you have to offer. If you’re a skilled worker with a college degree looking for a job related in any way to foreign languages or international business, immigration to Japan can be a bureaucratic hassle, but isn’t actually all that difficult once you find a company that wants you (although with the recent implosion of the aptly-named NOVA School, jobs may be harder to find until the 5,000 now-unemployed teachers here sort themselves out).
Still, the visa most teachers and white-collar workers have restricts employment to jobs that require foreign language skills or ‘international knowledge’. I could have worked as a teacher, translator, foreign investment consultant, import/export coordinator, or even a receptionist for a company with multi-national clients, but not as a waiter, convenience-store clerk or fire-fighter. And since the visa is employer-sponsored, I couldn’t open my own business.
If you’re an unskilled worker looking to do manual labor, then the hurdles are much higher. A law was passed in 1990 allowing descendants of Japanese emigrants (mostly South American) to come to Japan, where they would be eligible for any kind of work. There’s also talk about allowing nurses from the Philippines to make up labor shortages. Anyone else without family connections is pretty unlikely to get in.
The above examples are just for short-term work. If by immigration you mean actually settling here permanently, then yes, it’s a long and difficult process. Permanent residency (one step below citizenship: all forms of employment (except a few government positions) are permitted, no visa guarantor is required so you start your own business or do nothing at all, all government services (including housing loans) are available, and voting is even allowed in some regions) requires either 10 years residence or 5 years in Japan married to a Japanese citizen (so sunstone’s son’s years of marriage in the US wouldn’t count). The application process is more intense than for a visa (it can include providing 3+ years of tax and employment information, evidence of ‘community involvement’, evidence of self-sufficiency, plus an essay in Japanese on why you want residency) and takes about a year to process. Going the next step to citizenship is more of the same, plus you have to give up your old citizenship. (Upon preview: I see jovan has posted the requirements for that.) I still haven’t decided if I’m going to try, even though I fully intend to stay here at least until retirement age.