Japanese beetles nest and sleep in the ground. They burrow a few inches underground, or as deep as necessary to get adequate protection from the elements.
When it rains, Japanese beetles will dig their way through the soil and find a temporary home underneath the soil in order to find respite from the rain.
Japanese beetles do not form large colonies underground, although they do swarm together above ground while they are feeding and mating. They are more solitary while sleeping.
Japanese beetle grubs, on the other hand, spend months buried underground. They are not sleeping, but continually feeding on plant roots and growing until they are ready to become adults.
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