Japanese ranks as one of the world's dominant languages with over 124 million speakers. The vast majority of these speakers reside in Japan and the Okinawa islands. But millions of other near-native speakers live in Korea, China, or other parts of Asia. And another few million live in the U.S., Canada, Australia, and other nations.

The three written forms of Japanese consist of Kanji and two phonetic scripts (also called syllabaries or Kana). The Chinese introduced Kanji in the 3rd century. Then, in the 7th century Buddhists priests developed a phonetic system that formed the basis of modern-day Katakana. Finally, in the 8th century women of the Heian court in Kyoto developed a second phonetic script, now called Hiragana.

The transition from "Old Japanese" (based on eight vowels) to "Modern Japanese" (now based on five vowels) took place between the 12th and 16th centuries AD. Modern Japanese now consists of three different character sets (excluding the use of Roman letters too): Katakana, Hiragana, and Kanji.

The Kana scripts are called syllabaries because they represent unique sounds of syllables in the Japanese language. Each of these scripts has about fifty sounds.

Hiragana is the basic set of symbols used to write words, taught to every Japanese student, and commonly found in newspapers. Katakana is used primarily for poetry and words of foreign origin ("loan words"), borrowed from Portuguese, English, German, French, and many other languages.

In 1981, the Jo-yo- Kanji (Chinese characters for daily use) were standardized by the Japanese government. Currently, there are 1,945 recognized Chinese characters. These are taught in primary and secondary schools, and newspapers generally limit the use of Chinese characters to this standard set. Today, the influence of the Chinese language on Japanese remains apparent with approximately 40% of the vocabulary of modern Japanese consisting of words adapted from Chinese.

In terms of the spoken word in Japan today, there are three major dialects: the Kansai Dialect of Osaka/Kyoto/Kobe, the Kyushu Dialect of Japan's southern-most island, and the Tokyo Dialect of the Kanto Region. Of these, the Tokyo Dialect is considered the standard dialect.

Sources:
http://encarta.msn.com/encyclopedia_761568918/Japanese_Language.html
http://www.threeweb.ad.jp/logos/japanese.html