The population was down 18,323, with the number of deaths exceeding births, translating into a record net drop, or natural decline, of 73,024, according to the data compiled by the Ministry of Internal Affairs and Communications based on basic resident registers nationwide.
The number of deaths totaled 1,146,105, the highest since the ministry began calculating the data for March 1980. The number of births came to 1,073,081, the second lowest figure after that for March 2006.
Japan "may have become a society facing full-scale population declines as the number of deaths is on a rising trend amid the aging population," a ministry official said.
The population decline in the latest survey was partly offset by an increase in the number of people returning to Japan from overseas.
More people returned to Japan than left, resulting in a net increase of 54,701, according to the ministry.
Ministry officials said that an increasing number of Japanese are returning to the country as many companies are scaling down overseas operations.
The 2008 and 2009 surveys showed that Japan's overall population increased because the number of people returning to the country offset the natural decline in population.