Japan on Tuesday set up an administrative body aimed at easing citizens' concerns over the rapid rise in the number of foreigners in recent years, as policies concerning non-Japanese residents emerge as a key issue in Sunday's national election.

The body would serve as a cross-agency "control tower" to respond to issues such as crime and over-tourism involving foreigners, the government said.

Japan has long sought to maintain a homogeneous population through strict immigration laws, but has gradually eased them to supplement its shrinking and ageing labour force. The number of foreign nationals hit a record of about 3.8 million last year, although that is still just 3 percent of the total population.

The formation of the administration body comes after a group of lawmakers in Prime Minister Shigeru Ishiba's Liberal Democratic Party in June proposed measures to realise a "society of orderly and harmonious coexistence with foreign nationals".

Those measures included adopting stricter requirements for foreigners switching to a Japanese driver's license and for buying properties.

"Crimes and disorderly conduct by some foreigners, as well as the inappropriate use of various administrative systems, have created a situation in which the public feels uneasy and cheated," Ishiba said at the kick-off ceremony.

Concerns over the influx of foreigners, both temporary and permanent, have resonated with voters, with opinion polls showing a rapid surge in the popularity of tiny populist party Sanseito, which advocates a "Japanese First" agenda.

Public opinion polls show the LDP and its junior coalition partner Komeito are in jeopardy of losing their majority in the upper house election on July 20. (Reuters)