Suicides rose 7.1 percent to 34,427 in 2003 - the highest number on record since police began taking statistics in 1978, the National Police Agency report said.
Health problems were still believed to be the leading cause for suicide, accounting for about 45 percent of cases - roughly level with recent years.
But suicides related to economic troubles reached a new high, exceeding 8,000 for the first time, a police spokesman said. A total of 8,900 suicides were believed linked to debts, slow business, unemployment and other financial woes.
While Japan's economy has shown signs of a sustainable recovery recently, more than a decade of sluggish growth has lifted joblessness and forced large numbers of people into bankruptcy. Unemployment was 4.6 percent in May, though it has been dropping.
"It's severe," Prime Minister Junichiro Koizumi told reporters Friday when asked about the report. "We will continue to make efforts to improve our economic situation."
According to the report, about 40 percent of those who committed suicide were in their 40s or 50s. Overall, men accounted for almost three-quarters of suicides.
Japan has one of the highest suicide rates in the industrialized world. In recent years, it has recorded about 19.5 suicides for every 100,000 people annually, compared to about 14 per 100,000 in both the United States and Germany, according to statistics compiled by the United Nations.
In an editorial Friday, the Yomiuri newspaper called for the government to do more to understand the rising suicide rate, suggesting there are not enough prevention programs.
"We cannot avoid stress in our daily lives, but it is important to examine the causes of stress," the Yomiuri said. "We must consider society as a whole when we examine why this terrible situation has come about."
Amid a surge in debt-linked suicides in recent years, Economy Minister Heizo Takenaka has called for changes to the nation's lending system. Banks place corporate debt responsibility on the individual, forcing owners of small and medium-size businesses to go personally broke when their businesses fail.
Takenaka has blamed the lending policy for Japan's high number of debt-related suicides, calling it unimaginable in the West.
A recent Health Ministry report showed that suicide was the sixth leading cause of death after cancer, heart disease and other illnesses.
By Natalie Obiko Pearson