We examined the cross‐lagged relations between the home literacy environment and literacy skills in Japanese, and whether child's gender, parents' education and child's level of literacy performance moderate the relations. One hundred forty‐two Japanese children were followed from Grades 1 to 2 and assessed on character knowledge, reading fluency and spelling. Their parents responded to a questionnaire assessing the frequency of their teaching and shared reading. Results showed that parent teaching increased and shared reading decreased from Grades 1 to 2. Cross‐lagged path analysis indicated that the literacy skills in Grade 1 were negatively associated with parent teaching in Grade 2. The results further suggested that more educated parents of higher performing children, particularly boys, adjusted their involvement to their children's literacy skills, while less educated parents of lower performing children did not. These findings indicate the importance of parents' sensitivity to their child's performance.What is already known about this topic

Home literacy environment (HLE) plays an important role in children's literacy acquisition in Western and some East Asian contexts.

Children's early reading skills can have an impact on later HLE.

The direction of the relationship between HLE and children's reading skills may change from positive in Kindergarten to negative in Grade 1.

What this paper adds

In line with the findings of previous studies in other languages, Japanese parents adaptively adjust their home literacy activities to their child's literacy skills.

The effect of children's literacy skills on later shared reading is stronger among boys than among girls.

More educated parents of higher performing children adjust their involvement to their child's literacy skills, while less educated parents with lower performing children do not.

Implications for theory, policy or practice

We should encourage parents to be sensitive to their child's literacy skills to help them build a foundation that will boost future literacy development.

This can be particularly true of less educated parents with poorly performing children.

We should encourage educators to communicate the children's literacy achievement to their parents and also suggest the means by which HLE could be beneficial for their children's literacy development.