Japanese people hate saying no. Not only do they hate saying no, they even hate using negative endings to verbs. This presents a problem for many foreigners, who upon arrival suddenly find that there are many things they would like very much not to do.
Well, have no fear, citizens, there is a wonderful Japanese word called 遠慮（えんりょ）. Encapsulated within these two tiny-yet-complex characters is a phrase with a built-in no. Yes, that’s right, by doing this verb you are actually not doing something.
For example, the following conversation:
Now, in English:
Supervisor: Hey Daniel, umm, there’s a drinking party next week. You in?
Daniel: Oh yeah? Thank you for inviting me. Unfortunately I’m a bit short with cash this month, so I’ll hold back.
If you wanted to get even more polite you could say, 遠慮させていただきます, and utilize the causative tense.
遠慮 literally means “to hold back” or “to be reserved,” something like that, but what it really means is no. It reminds me a lot of that scene in Pirates of the Caribbean where the captain says, “I am disinclined to acquiesce to your request.” The lady’s all like, WTF? and then he goes, “IT MEANS NO!”
遠慮 is Japanese code word for no. Everyone understands the meaning, and it can efficiently and politely be used to say “No thanks.”
(A side note:
It’s good practice to thank people for an invitation whether or not you accept or decline. That way the invitations will continue to come. )