Japanese has significantly fewer sounds than many languages, so homonyms are inevitable. Thanks to kanji this isn't much of an issue in written Japanese, but spoken Japanese (and Japanese written without the use of kanji) relies heavily on context.

The alternative would be ridiculously long words. Example: the English word "extra" (five letters, two syllables) is pronounced "ekisutora" in Japanese (still five letters, but also five syllables); this is a result of every consonant needing to be followed by a vowel (except for "n" and a short list of compounds like "sh"). Additionally, Japanese only has five vowel sounds, plus a few that you can force out (e.g. "ka" can be slightly modified to "kya" to approximate the "a" sound in "cat"). Japanese also contains fewer consonant sounds than a number of other languages.