Which is more difficult: permanent residency or naturalization?

This question is really a matter of opinion and every situation is different. First, neither one is easy. But in general, there are two different answers for the two major types of residents in Japan:

• If you are married to a Japanese national or a non-Japanese with permanent residency status, permanent residency is easier.
• If you are single or are not married to either a Japanese national or a permanent resident of Japan, Japanese naturalization is easier.

There are many theories, but the most common theory as to why it's so relatively easy to get 永住者の資格 {eijūsha no shikaku} (permanent resident status) if you're married — to a Japanese or another permanent resident — is that the permanent residency is given to you not for your sake alone, but rather the sake of your Japanese family. In other words, they don't want a visa to limit your ability to support your spouse or your family in Japan, regardless of whether or not you're considered "skilled labor." They don't want you to be forced to take your Japanese family out of Japan because your visa doesn't qualify you for a certain type of job or you're between jobs. Even if you divorce, in which case you would lose a 日本人又は永住者の配偶者等 {nihonjin mata wa eijūsha no haigūsha nado} (spouse of Japanese or permanent resident) visa status, they still want you to be around to provide financial or child rearing support if needed.

So, once you've passed the internal benchmarks that reassure immigration that your marriage is not an "on-paper-only" aka "green card" marriage (the primary variable being the years you have been married — usually three, sometimes five) and you're not poor and your immigration record & criminal record is clean, you're basically "in" after only one year of Japanese residency.

However, if you're single or married to a non-Japanese non-permanent resident apply for permanent residency, the bar can be quite high. The guidelines ask for 10 years of continuous residency in principle (though there are cases of exceptional people receiving it in less time — but never less than five years), and even then there's no guarantee. The Ministry of Justice has a list of actual cases of exceptionality judgement that were both approved and not approved, and lists the reasons why. While some of the approvals were for being here on the wrong visa (example 2) and not being in the country long enough (example 1), the vast majority of the rejection reasons were for 社会的貢献等には当たらない {shakai teki kōken nado ni wa ataranai} (not enough of a contribution to society). There's even an example of a ALT (Assistant [English] language teacher) who was judged as not being a big enough of a contribution. If you look at the ones who were single & accepted, many of them were working in higher education or science and research at the Ph.D level, and had been published and are recognized by their professional peers within their accredited field. Even more interesting are the approved cases where the candidate had been in Japan for more than 10 years, in which case you would think the exceptionality requirement wouldn't be needed.

On the other hand, there are accounts of single people who did not qualify for permanent residency but did qualify for naturalization.

So why do so many people opt for permanent residency rather than naturalization if naturalization gives you more rights (voting, holding office, public servant employment, etc)? Three primary reasons:

1. Permanent residency doesn't ask you to swear an oath of allegiance to the Constitution of Japan or give up your other citizenships. Viewed from a non-loyalty non-family/friends non-roots point of view, if your original citizenship is to a highly developed industrialized country (such as the U.S., U.K., Canada, Germany, Australia, etc.), you're probably hesitant to give up any type of real or imagined "safety net" you have in your original country (be it a social welfare system, military protection, career connections, etc.), even if you intend to live in Japan your whole life. Your original citizenship is your "insurance policy"; it gives you the unconditional right to return and try to restart your old life in your original country.
   
   
2. Permanent residency status in Japan is pretty liberal compared to permanent residency in some countries like the U.S. In the U.S. case, if you're outside of the country for more than a year, you'll need a fairly expensive ($170) re-entry permit. And this re-entry permit is only good for two years. After that, you may need a lawyer and/or luck to demonstrate to the U.S. that you haven't "abandoned" your permanent residency, re-entry permit or not. Furthermore, U.S. permanent residents are liable for taxation on foreign income earned while resident overseas for at least 10 years after leaving the U.S.
   
   In contrast, for Japan, as long as you make sure your single (¥3000) or multiple (¥6000) 再入国許可 {sai-nyūkoku kyoka} (re-entry permit) doesn't expire (good for 3 years for permanent residents) and you keep renewing it, there's no written limit as to how long you can be outside of Japan. You don't even need a re-entry permit anymore if your stay outside Japan is less than a year and your Status of Residence stays valid and doesn't expire.
   
   
3. Permanent residency doesn't add any additional responsibilities/duties or ask of any additional commitments from you. Right now, there's only one "Duty" in the Japanese Constitution, Chapter III; Rights and Duties of The People (The Japanese "bill of rights"):
   
   Article 30: The people† shall be liable to taxation as provided for by law.
   
   

   Currently, non-Japanese who have lived in Japan for less than five years are not liable for any tax on income earned outside of Japan. After five years, they are considered "permanent residents" by the National Tax Agency (regardless of whether they are permanent residents in the eyes of the Immigration Bureau) and liable fo taxation on all income, domestic and foreign.

   It's possible that if you do something illegal in Japan but are in a foreign country, Japan may be able to extradite you if you only have Japanese citizenship. If you're somehow a dual citizen and you're on Japanese soil and you do something that is illegal in Japan but legal in your home country, you may be treated as a Japanese from a matter of sovereignty and there's no guarantee that you'll get the same consulate or embassy services that a non-Japanese would get.
   
   FINALLY, and this may sound like a very theoretical wonky argument, it is possible, that sometime in the future, Japan could enact a law, similar to the U.S., that taxes its citizens that live abroad. And while it's extremely unlikely that Japan would implement any sort of mandatory military service or draft thanks to Article 9 of the Constitution, you must remember that a lot can happen in the decades that will span one's life as a naturalized Japanese.
   
   So even though the amount of "Duties" that the Japanese Constitution assigns to its citizens today is small (taxation), there's no guarantee that the list of Duties and the laws related to them will grow in the future.
   
   Fortunately, the right to 離脱 {ridatsu} (renounce [one's citizenship]) is guaranteed by Article 22 of the Japanese Constitution.
   
   

   It would be interesting to see how many Japanese-Americans would keep their Japanese nationality if Japan taxed its overseas citizens. It would certainly be an interesting (if not bureaucratically cruel) way to enforce the MoJ's 国籍の選択 {kokuseki no sentaku} (Choose Your Nationality) policy.

So in Japan, permanent residency is similar to a "super visa." (though it's technically not a visa) You can't vote, hold office, be a lay judge for a trial, or take a public welfare affecting ergo citizen-only job — ex. public school teacher, fire fighter, police officer, Self Defense Force (SDF) member, civil/public servant or bureaucrat, etc — but you can be single/divorced, homeless, and unemployed and still have the right to be in Japan indefinitely (providing you do not commit any serious crimes) once you earn it.

† The original Japanese wording of Article 30 uses the word 『国民 {kokumin}』 ('citizen') for 'people,' but it's been ruled into law that aliens in Japan are also obligated to pay tax. Sorry.