JR, a private consortium, largely controls that network, and all rail is held privately, although historically the government helped rail to grow in Japan. It considered railways an efficient way to transport people without using too much precious oil. However, the same cannot be said of freight, little of which goes by railway.
For passengers though, rail has subsequently become central. This happened largely because firms bought up land near to existing cities and constructed lines to what would become suburbs. In due course, those areas became densely inhabited, with urban areas growing around the rail lines.