The purpose of this paper is to examine income inequality and poverty in Japan, using statistics from the Japanese government and the OECD. This thesis addresses the following questions. What are the current levels and trends in inequality? What are the causes of inequality and poverty? I answer those questions both within nations and across the countries, focusing especially on Japan and OECD countries. The thesis begins with a discussion of Japan's income inequality and poverty. It then analyzes the reasons for Japan's increasing income inequality: population aging and labor market instabilities.