This article is loaded with interesting statistics. First, Japan spends 3.5 percent of its GDP numbers on education, the second lowest of 30 OECD countries. (lowest Greece) This is also down from 3.7 percent in 2003.
Second, the country has 28.4 students per class at elementary, and 33.5 students per class in secondary education, second highest after Korea.
Where are they cutting corners? Well with these numbers it's obvious. Fewer classrooms and teachers. (Just talking about this the other day after seeing a large public high school. Terribly depressing, dreary place to learn. Won't send my kids there.)
Finally, international students in Japan schools are 5 percent of the world's total foreign student population, sixth among OECD nations.
Education spending renders Japan second to last in OECD | The Japan Times Online