Abstract Beginning with a review of Japanese welfare state reform in 1990s, we discuss similarities and differences between Japan and Germany in the implementation of three major reforms: public pension reform, health care reform and introduction of long-term care insurance. The latest public pension reform in both countries has the same aim: to establish middle- and long-term stability of the system against ageing of the population. The 1999 Japanese Pension Reform has continued the effort to expand the funding basis and to reduce the future benefit level, and two laws passed in 2001 in the field of occupational pension have paved the way for heavier reliance on private arrangements. Germany's pension reform of the year 2000 invented a new formula to offset the reduction of public pension benefits through introducing a tax-supported private pension system. This approach may have a strong impact on Japanese reform debates. The freedom of choice of sickness funds by the insured in Germany since 1996 has st...