Japan has seen a marked increase in female participation in the workforce — surpassing the U.S. and Europe in terms of percentage — but there’s still a glass ceiling for women in leadership roles, says Kathy Matsui, a former vice-chair and strategist at Goldman Sachs Japan.

Matsui is widely recognized as the one who coined the term “womenomics” in 1999, which became a key pillar of former Prime Minister Shinzo Abe’s economic reforms aimed at helping Japan boost its economy by bringing women into the workforce.

Japan has made significant progress on that front due to a tight labor market and an improving economy, Matsui said.

“Since we broached the topic of womenomics 22 years ago, for instance, the percentage of Japanese women who can work (and) were actually working outside the home used to be one of the lowest in the G-7,” said Matsui in an interview on CNBC’s “Squawk Box Asia” on Monday.

But that trend has reversed.

Before the coronavirus pandemic, the percentage of Japanese women working shot up close to 72% —close to the highest, according to Matsui. That’s compared to only about 67% in the United States and 63% in the European Union, she said. “So the numbers are actually way up as a function of a tight job market and a growing economy,” she noted.

Still, there is a glass ceiling with regard to women occupying top leaderships positions in Japan,  according to Matsui. 

“But where that ceiling really affects Japan is that there’s still a dearth of women in a leadership position,” she said. “For instance, female manager ratio is still stuck at around 15%. And the percentage of female board directors still in the single digit territory — less than half of what we see elsewhere in the developed world.”

“So we still have a long way to go in terms of grooming women to positions of decision-making and authority,” she pointed out.

According to a Nikkei report last year, women occupied less than 8% of management positions in corporate Japan. This is far less than the goal set by the Japanese government which aimed to have women occupy 30% of management posts by 2020. 

While the government still has a role to play, in terms of making the environment and infrastructure easier for women to participate in the workforce, corporate Japan also needs to step up, said Matsui.

“I think there’s a lot of onus or responsibility on the employer side as well, to figure out how to not just nurture these women but motivate, encourage and give them opportunities that are on par with their male colleagues. So as to reach that goal of higher women in leadership roles,” she added.