This analysis is to compare the overall and sectoral Korea`s BOP of service trade to Japan`s and analyze their competitiveness of service industry by comparing market share and revealed comparative advantage(RCA) index of both countries. It also tries to find and compare the determinants of service trade in both countries and points out its policy implication. Korea has its comparative advantage in transportation sector(freight and passenger transportation) while Japan has it in other transportation, and other service sector(business service, royalty license, private culture and entertainment service etc.) Export of both Korea and Japan is shown to be positively related to GDP growth of their corresponding trade partner. In Korea, it is positively related to Won-Yen exchange rate in travel sector as expected, while negatively related to it in passenger service sector. However, in Japan, it was shown to have nothing to do with the exchange rate. Export of both countries is not related to their relative prices as well. In case of import side, most of the import service by sector is positively related with their own GDP growth. Won-Yen exchange rate diminished the imports of travel and passenger service in Korea, while it lowered the imports of same sectors as well as freight service in Japan. Relative prices has positive effects on the imports on overall service, transportation (passenger and freight service) and other service in Korea, and on the imports of overall service, transportation (passenger service) and travel service in Japan.