We compared the reading development of 77 deaf and hard-of-hearing (DHH) Japanese children, aged 5-7 (40 females), with 139 of their hearing peers (74 females) in 2018. We assessed each group's phonological awareness (PA), grammar, vocabulary, and reading of hiragana (Japanese orthography children learn first). DHH children showed significant delays in grammar and vocabulary but only a slight delay in PA. Younger DHH children scored better than their hearing peers in reading. Although PA predicted reading for hearing children, reading predicted PA for DHH children. PA partially explained grammar skills for both groups. The results suggest educational intervention for reading acquisition should be based on not only general linguistic features but also each language's unique characteristics.