When you are new to Japan, addressing people can be tricky. There is a different level of formality, and people address each other accordingly.
Business coworkers: Last name + san
When the interaction is formal, people usually call each other by their last names plus the suffix -san (Tanaka + san = Tanakasan). Adding san at the end of someone’s last name makes it very polite and appropriate for professional relationships. However, some people will refer to others with their first name + san (Ayaka + san = Ayakasan), which adds a friendlier tone. This suggests that the person is close but not close enough to be friends.
Business Clients: Last name + sama
Last name plus sama is the most formal and polite way of addressing others. This is generally used to refer to someone outside of work, such as clients. The people in the service industry will call customers “Okyakusama” (お客様). This is because customers are higher in position. Be careful not to overuse -sama as this is only used to refer mostly in business situations.
Friends: First Name + san, chan (for girls), or kun (for boys)
The way friends address each other depends on the closeness and the age difference. With friends of similar age or younger, people would call each other only by their first names (yobisute), the closest form of addressing people. If your friend is older, senpai (先輩) is added at the end of first or last names ( Ayaka senpai or Tanaka senpai). This can also be used when addressing coworkers. Although adding -chan (for girls) and -kun (for boys) are mostly used to address younger kids, it's not rare for adults to add -chan/-kun at the end of a nickname (ayano: aya + chan= ayachan あやちゃん).
Depending on the closeness, age difference, and the environment people are in, the nuance changes. That’s why the simple act of addressing others can be confusing at times. When not sure, the safest is to use -san as it will not sound rude or offend anyone!
The Level of Formality & Closeness
Very Formal Formal Casual + Close
Last name + sama Last name+san First name+san senpai chan/kun/yobisute