Japanese movement watches are those that have all their internal mechanisms made in Japan. The term can also include watches assembled in any other country with Japanese parts.
There are three major watch manufacturers in Japan: Citizen, formerly known as Shokosha Watch Research Institute, Seiko and Casio. These three companies produce watches that have mechanical or quartz movement. Mechanical movement watches use winding springs that transfer energy through a number of other springs and gears to move the watch hands. Quartz movement watches use batteries that send electrical pulses through pieces of quartz that act as oscillators and cause them to vibrate. Those vibrations are counted by circuits and converted into single pulses every second, resulting in the consistent movement of the watch hands.