Japan has its Suzukis, Tanakas, Katos and Watanabes just as the English speaking world has its Smiths, Taylors, Collinses and Wilsons, but there is also incredible variety in Japanese surnames, and especially first names – every bit as much, if not more than, there is with Western names. If you teach English in Japan, you'll almost invariably find that there is a student or two in a class whose surname you’ll have never come across before.
According to reliable Japanese sources, the top ten names in Japan are Sato, Tanaka, Yamamoto, Saito, Suzuki, Watanabe, Nakamura, Takahashi, Ito, Kobayashi, which cover about 10% of the population. The next 100 surnames cover 35% of the population, and the next 1,000, 74%. In total, there are estimated to be about 300,000 surnames in Japanese.
Unlike the most popular English names, the majority of which are derived from occupations, most Japanese surnames are derived from place names. Obvious ones from the top 10 are Tanaka (“in the fields”), Yamamoto (“foot of the mountain”), Nakamura (“middle village”), and Kobayashi (“small wood”).
While in formal situations, the Japanese refer to each other by their surname plus the polite “san” or the extra polite “sama,” in casual situations they still use surnames, but suffix it, in the case of men, with “kun” or the even more endearing “chan” – both which are definitely best avoided unless a Japanese person has taken the initiative of attaching it to your name. In the meantime, play safe and stick to surname + san.