Sake consists of roughly 80% water. Therefore, it is not an exaggeration to say that without good water you cannot make good sake. Luckily, about 70% of Japan's topography is actually mountainous. Therefore, Japan has an abundance of quality water supplying the roughly 120o sake breweries currently operating today.
Historically, all of Japan's major brewing locations were centred around places with a good water supply, and even today, the two largest areas by production volume are Fushimi in Kyoto and Nada in Kobe. Both of these areas are blessed with an abundance of high quality water suitable for sake brewing.
Rice is the fundamental raw ingredient of sake. Although it doesn't have as much influence on the final product as koji does, or arguably even the yeast for that matter, the rice used is still crucial in making good sake. This is particularly the case with the premium categories which often call for special rice grown specifically for sake brewing (shuzokoutekimai, 酒造好適米).
There are around 100 different types of brewers rice at present in Japan. However, the one said to be the most suitable for making ultra-premium daiginjo is that of Yamada-Nishiki. This has as much to do with its ability to withstand a high degree of polishing and how it behaves when brewing as it does for the tastes it will produce in the final sake.
Unlike grapes used in wine making, rice does not contain the necessary sugars to convert into alcohol. Therefore, roughly 15-25% of all the rice used in a typical batch of sake will be allocated for making koji, a type of mould containing active enzymes. To cultivate these enzymes, another mold known as Aspergillus Oryzae (koji-kin,麹菌) is coaxed into growing on and into steamed rice. The result is a sweet substance that often has an aroma reminiscent of chesnuts.
Crucially, the finished grains contain the necessary enzymes that break down starch into sugar. This sugar is then concurrently coverted by the yeast into alcohol. Although simple in theory, making koji is often said to be the most challenging step in sake production, and the one that has arguably the most influence on the final taste.
Yeast is the final key ingredient in sake brewing and is responsible for converting the sugar, which is concurrently being produced by the enzymes in the koji breaking down starch molocules in the rice, and turning it into alcohol and carbon dioxide.
This unique method of fermentation (Multiple-Parallel) requires a strong yeast that can tolerate a high percentage of alcohol in the main mash. Furthermore, particulalry in modern ginjo brewing, it must also be able to withstand very low temperatures over periods of up to 5 weeks.
For this reason, since the early 1900's the Brewing Society of Japan has issued specially choosen cultured yeasts (seishu kobo) and offered them to all the breweries in Japan. These numbered yeasts were all chosen due to their ability to reliably produce a healthy fermentation, and in the case of more modern strains, lead to aromatic esters in the final sake.