The Japanese give gifts very often, not only because they want to but because of giri (loosely means social obligation). This is not uniquely Japanese, many cultures and people feel they have to give gifts to certain people on holidays/birthdays, particularly if the person had given them a gift.
Some gift giving etiquette (these are generalities since some people will be more informal):
-Give gifts with both hands. Giving a gift with one hand out front and another to the side or behind your back show a lack of intimacy or sincerity.
-Take some time thinking about how much to spend on the gift. Don’t want to spend too much making the person feel socially obligated or spend too little and insult them.
-It is customary to initially refuse offered gifts a few times. The giver of the gift will insist that you take the gift anyway. This is a common verbal dance that everyone knows how will end (you accepting the gift).
-People when given a gift will often put the gift to the side without opening it. This is done to save face, if the gift does not meet the standards or expectations of the receiver, thus preventing embarrassment.
-Purchased gifts are generally preferred to homemade, since homemade are usually considered cheaper.
-How the gift is wrapped is in many ways more important than the actual gift. Very few people wrap the gifts themselves instead have it wrapped by a professional or have it in a department store bag.
-If given a gift, give a gift in return.
-If giving a personal gift, do it one on one not when in a group.
Some gifts not to give:
-Anything in four parts/set of four since the word for four is the same as the word for death (shi).
-Avoiding nine is a good idea as well since it is a homophone for suffering.
-Combs. The word for comb is Kushi which when broken apart means suffering (ku) and death (shi).
-Green Tea. Generally not a good idea since is used at funerals and memorial services.
-Clothes that touch the skin to the elderly, is considered an intimate gift.
Gifts are given for many reasons, here is some (list is incomplete):
Temiyage: Gifts given to say thank you or sorry.
Omiyage: Souvenirs. It is customary to bring back souvenirs for coworkers/family when you go on a trip. The reason for this is to assuage the shame of leaving to take a vacation/trip. These are also the gifts you would give to someone when you visit someone’s home for the first time. It is impolite to not give a gift when visiting someone’s house (called tebura -meaning empty handed).
Hikkoshi Aisatsu: Gifts given when moving into a building or neighborhood by the newcomers to introduce themselves. Traditionally this was a dish towel. Though more commonly nowadays some type of sweet like cookies or rice cakes are given instead.
Osenbetsu: Farewell gifts given to people who are leaving town or departing from a job. The most common gift is cash. A thank you card is generally expected in return.
Go Nyu-gaku Iwai: Gifts given to children who are entering a new school. Most common given gifts are school related ones like books.
Omimai: Gifts given when visiting someone in a hospital. Most commonly given gifts are cut flowers and books. Do not give plants with roots since it symbolizes a long stay or camellias which remind people of death.
Go-Kekkon Iwai: Wedding gifts. Usual gift given to the newlyweds is cash, preferably crisp new bills since they symbolize the couple's new life together. The person throwing the wedding gives a bag of gifts to the guests as well.
Go-Shussan Iwai: Gifts for healthy newborns. The gift is usually given a week after the babies birth and is usually things like clothing and toys. If the baby is not healthy it’s a good idea to wait to give them the gift until the baby is healthy. In return the parents of the baby will give a small gift usually something like a cup with the babies name on it.
Ososhiki: Funeral gifts. Guests usually bring money, old used used bills to symbolize being unprepared, and are given a gift in return.