Sake (酒) is Japan's traditional rice wine — though "wine" is a loose word for it. Brewed from rice, water, yeast, and a mould called kōji, it is closer in method to beer than to grape wine, yet drunk like neither. In Japanese, sake can mean alcohol in general; the rice drink itself is more precisely nihonshu (日本酒), "the alcohol of Japan."
How it is made
Sake's secret is kōji (麹), a mould grown on steamed rice that breaks the rice starch into sugar, which yeast then ferments into alcohol. Because these two steps, starch to sugar, sugar to alcohol, happen at the same time in the same tank, sake brewing is unusually delicate, and master brewers (tōji) train for years. The rice is first polished to strip away the outer layers, and how much is removed helps define the grade: the more the grain is milled down, the more refined and fragrant the sake. Premium tiers like ginjō and daiginjō use highly polished rice; junmai means pure rice with no added alcohol.
How it is drunk
Sake can be served warmed (atsukan, 熱燗) in winter or chilled in summer, poured from a small flask (tokkuri, 徳利) into little cups. A point of etiquette: you do not fill your own cup. You pour for others and let them pour for you, a small ritual of attention that runs through Japanese drinking. Sake is central to celebration and ceremony too: barrels are broken open at weddings and New Year, and it is offered to the kami at Shinto shrines, where you will often see stacked casks donated by brewers. It is the natural companion to an evening at an izakaya.
Words & idioms to take away
Idioms & proverbs to carry away
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日本酒 vs 酒: 酒 (sake) is alcohol broadly; 日本酒 (nihonshu) specifies the traditional rice brew. Order "sake" abroad and you mean the drink; in Japan, be specific.
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お酌 (o-shaku): the act of pouring drink for another; filling a companion's cup, never your own, is basic table courtesy.