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Although a much higher proportion of Japanese people understand English than people from English-speakering countries understand Japanese, it isn't as high as the Scandinavian countries.

I wouldn't find this so surprising if it weren't for the high incidence of English loanwords in the language, and English used as decorative text in advertising and the like.

Is it mainly English's grammar that they have difficulty understanding? Or are other factors to blame, such as English's non-phonetic writing, and it having sounds that they think they can't pronounce?

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I think that the main factors are going to be language external. Japanese people do not know English very well for reasons having to do with how English is used in Japan, and reasons having to do with the general language ecology in Japan.

Scandinavians tend to have very good English, and there are language-internal reasons (their native language has a large number of vowels, there are many Germanic cognates, etc.) as well as external reasons (English has become established as a lingua Franca in Northern Europe, there is intensive English education and ample opportunities to practice, living in a multilingual society, they are comfortable communicating in a language that they don't master, etc.). So it could be debatable whether the language-internal or the language-external reasons are more important in determining the English skills of Scandinavians.

But consider English in Nigeria. Roughly 400 languages are spoken in Nigeria, most of which are as different from English as Japanese is from English, but educated Nigerians tend to have a high success rate in learning English as a second language. In this case, there is nothing about their native languages that helps to explain their success in learning English. The status English has in government and business in that country, as well as the multilingual nature of the society, have to play a large role.

My hunch then is that grammar is not the main barrier for Japanese people to learn English, because grammar is not a barrier for English learning in countries where the sociolinguistic situation is favorable for English learning; I think that all of the main barriers have to do with the sociolinguistic situation in Japan: that the society is basically monolingual, and that languages other than Japanese do not have an important status in any major public sphere.

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    I agree. In addition, when learning other languages, one has to be willing to make (sometimes embarassing) mistakes. In a culture where "face" is important, making mistakes is a worse cultural situation than in non-face cultures; this leads to people not even trying, or concealing that they have a weak skill in order to not look bad.
    – Tangurena
    Jan 16, 2012 at 17:24
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    You don’t even have to go to Nigeria, you can stay in Scandinavia (or Fennoscandia for those being particular) and compare English speaking Finns and Swedes (Finnish not being Indo-European though probably under sprachbund influence). While you can typically tell by their accent whether somebody is Finnish or Swedish, in terms of grammar and vocabulary their English is practically equally good.
    – Jan
    Nov 6, 2019 at 6:46
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For language internal issues, vocabulary, because of its unbounded scale, is the primary barrier to foreign language understanding. Having lots of cognates (like between English and Romance languages for educated communication) helps immensely. The lack of cognates between English and Japanese (despite the minimal borrowings each way) might account for difficulty in understanding.

Externally, it is cultural factors that are the primary barrier that limit language understanding. Extensive media, intermarriage, accepted lingua franca, prestige and privilege, enforcement, etc. all increase the use of a language and therefore understanding. Media is about the only one of these that works in favor of English in Japan, and media and prestige of English is higher (I guess) in Scandinavia.

The question is somewhat vague (is it about a generally accepted perception of Japanese people vs Scandinavians, or is the a quantitative analysis behind it (number of EFL speakers per capita plus proficiency) or what. Just accepting the hypothesis that Scandinavians are 'better' at English than the Japanese, I would speculate that it has little to do with the language itself/linguistic principles, but rather that Scandinavians have a higher incentive to learn English than the Japanese have (relative populations, economic strength, job opportunities).

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