[godwine]

I think his question is not what is being studied or what are Japanese arts, but whats is the most popular studied locally in Japan.

You will find a lot of people practices Karate, Muay Thai (or different forms of Kickboxing) and Jiujitus due to the popularity of MMA. Karate still domniates it (in the sense of the number of participant, I am not indicating that Karate is the ultimate art), due to its history and the number of different style.

There are many other arts thats being practiced, but not as popular, Naginata and Iaido for example, is an extremely traditional art (TRUE art), it is popular, but not as well known (it falls in the Kobudo category)

There is a rising popularity in "shoot fighting" and simply "grappling" due to MMA.

If you are looking for a Traditional Art, your choices will really be Karate, Judo, Jiujitsu, Kendo, Iaido and Niginata...

Good luck