OBJECTIVES: To analyze the national trends and correlation between public funding for pneumococcal vaccination and pneumonia disease burden in the Japanese elderly population over 65. METHODS: Three vaccination funding indicators were developed. They are percentage of municipalities offering subsidies; percentage of elderly population covered by subsidies; average subsidies per elderly person.  From the national statistics, two disease burden indicators were age-adjusted all-cause pneumonia mortality rate and hospitalization rate.  All-cause pneumonia is defined by the ICD-10 code (J12-18). The standard age distribution is the 1985 national population of Japan. National trends and the correlation coefficients between the funding and disease burden indicators were examined.  The Pearson correlation coefficient performed by SAS. RESULTS: The percentages of municipalities offering vaccination subsidies and coverage of elderly population increased from 0.6% and 0.22% in 2005 to 38.1% and 22.3% in 2012 respectively.  The estimated average subsidies per elderly person increased too from 7 JPY in 2005 to 900 JPY in 2012.  Conversely the age-adjusted all-cause pneumonia mortality rate decreased from 319 in 2005 to 273 in 2012 per 100,000 in the elderly population.  Similarly the hospitalization rate decreased from 98 per 100,000 in 2005, to 91 and 86, in 2008 and 2011 respectively in elderly population.  The correlation coefficients of the three vaccination funding indicators with age-adjusted all-cause pneumonia mortality rate were -0.24, -0.31 and -0.27 respectively, and hospitalization rate -.0.09, -0.16 and -0.19 respectively during 2005-2012. CONCLUSIONS: Pneumococcal vaccination has played an effective role in reducing the pneumonia burden in elderly population in Japan from 2005 to 2012.  For vaccination to be fully protective, adequate public funding is necessary to promote and improve vaccination uptake in the target population.  Further strengthening public funding policies and resources would be an effective way to reduce future national healthcare burden and expenditure due to pneumococcal diseases.