TOKYO: A Japanese district court on Wednesday ruled that not allowing same-sex couples to marry is "unconstitutional", setting a new precedent in the only G7 nation not to fully recognise same-sex partnership, though it rejected demands for damages to be paid.

The ruling, the first in Japan on the legality of same-sex marriages, is a major symbolic victory in a country where the constitution defines marriage as being based on "the mutual consent of both sexes."

As it currently stands, same-sex couples can't inherit their partner's assets - such as the house they may have shared - and also have no parental rights to any children their partners may have.

Though partnership certificates issued by individual municipalities around the nation help with renting places to live and hospital visitation rights, they still don't allow the same full legal rights as for heterosexual couples.

The Sapporo District Court threw out the demand for damages by the six plaintiffs - two couples of men and one of women - who had asked that the Japanese government pay 1 million yen each in acknowledgment of the pain they suffered by not being able to legally marry.

But the recognition that not allowing them to marry was unconstitutional was the victory the plaintiffs, their lawyers and activists had been hoping for as a key symbolic step forward and precedent-setter.

Similar cases are currently being heard in four other courts around Japan and this ruling may influence the outcomes there as well.

By Asian standards, Japanese laws are relatively liberal. Homosexual sex has been legal since 1880, but social attitudes keep the LGBT community largely invisible and many have yet to come out even to their families.

Some in the business world say Japan's not allowing same-sex marriage makes it difficult for companies, especially foreign companies, to attract and keep highly-skilled labour in an increasingly international economy.

The American Chamber of Commerce last year issued a statement saying that Japan's stance makes it less competitive internationally as a result.

A number of companies have taken their own steps to work around the situation, including both international companies and Japanese firms such as Panasonic. But there are limits.

"For things that are part of the national system, such as pensions, there's nothing they can do," said Masa Yanagisawa, head of Prime Services at Goldman Sachs Japan and a board member of the NGO Marriage for All Japan.

"All the other advanced countries have this, so Japan will lose out competitively. Then there's the fact that people can't be who they are. It becomes quite business critical."