Each country or cultural region has a uniquely-structured industry responsible for producing, promoting, and distributing the products that make up what we consider “pop culture.” In the case of Japan, there is a single organizational category most responsible for the form and content of pop culture: the artist management company, called colloquially jimusho (”office.”) The jimusho wield a powerful cultural influence on all fields that require performers — television (variety and drama), advertising, music, modeling, gravia, and films.

I will argue in this series that much of the content produced in these specific fields conforms to the business needs of artist management companies much more than it is created in response to audience desires. The opposite is also true: Non-jimusho controlled fields such as manga and indie music have enjoyed much more freedom of expression. In the case of manga, placement of certain titles within magazines is often tied directly to consumer feedback, meaning that competition is alive and well and consumers play a large role in guiding the industry.

With this in mind, we aim here to get a full understanding of the jimusho system in order to understand the structure in which Japanese popular culture is produced. Seeing that there is little written formally about the jimusho, we offer this multi-part series on Japanese artist management companies.

A note: This series is not meant as an “exposé” but a collection of the most reliable information about a relatively secretive industry for the purpose of sociological and business analysis. We welcome any corrections and additions.

Part I - What are the Jimusho? Roles and Labor Relations

The main role of the jimusho is essentially to “manage” the careers and schedules of artists, entertainers, athletes, and celebrities. They, however, claim a much deeper hold on the industry than simple management. The jimusho create stars much more than they just help maintain their fame. The stronger jimusho plan out every part of the performer’s persona, style, mannerism, and career. Most jimusho also have publishing wings, creating long-term revenue streams from songwriting related to their stars. Many idol management companies — such as Johnny’s Jimusho — finance and produce the master recordings of their singers, relegating record companies to pure distribution roles. This also means the jimusho can capture a large percentage of money made from CD sales.

The first important thing to understand about Japanese jimusho is the relation between labor and management. These companies are sometimes called “agencies” but they do not normally use “agent relations” — i.e., where stars hire the jimusho to act on their behalf. In the United States, William Morris and CAA perform agent services for 10% of the deals they broker, but stars have the ultimate power in that specific relationship as they are allowed to change agents or agencies at any time.

Japanese jimusho, on the other hand, hire their talent as salaried workers. They pay their “employees” a monthly salary, which usually starts at the relatively low ¥200,000 and can be re-negotiated on a yearly basis. (That being said, many famous stars have not been able to significantly raise their salaries to match the revenues they have brought to the company.) In exchange for the salaries, the artist relinquishes rights to 100% of their media appearance fees, copyright royalties, publishing payments, and any other income. Yes, 100%. If an artist secures a lucrative commercial contract, for example, this will not be reflected in his/her salary as any kind of bonus.

Management companies claim rights to this income, however, on the logic that they invest large sums in building up a young star. Hiroshi Aoyagi, author of Islands of Eight Million Smiles: Idol Performance and Symbolic Production in Contemporary Japan notes that the price of producing an “idol” singer can cost upwards of ¥30-40 million. The companies provide new talent (although most often charge for) lessons in singing, acting, dancing, manners, speech, and other skills required for celebrity status. Jimusho create appealing stage names, change appearances (sometimes even fronting money for plastic surgery), and provide clothing and cosmetics most flattering to the talent. Only when the talent makes their formal debut does the company see any returns. Therefore this high risk business model requires that all eventual income go directly to the management company.

Now many stars are able to negotiate an income increase in light of greater sales, but those who cannot unfortunately are not able to move to a different management company. While stars in the United States can change their agents and personal managers at a whim, Japanese stars cannot freely move management companies. In my own survey of 1300 popular musicians between 1985 and 2004, only around two dozen changed management companies. In other words, it is not a free market where Japanese stars can look for the best management deal. It is a “closed system.”

How do the jimusho keep stars in their stables? As a way to ensure that talent do not leave for other agencies for better deals, the jimusho have informal agreements to blacklist any talent who “defect” to other companies or go independent. With each star being an “investment” — both in terms of training but also of use of the management companies’ established media and industry connections to become famous — the jimusho have an economic incentive to curb their talent’s mobility. This secures profitability for their initial investment.

There is only one accepted way of changing jimusho: moving up to a more powerful organization. Horizontal movement or going independent are essentially verboten. Larger jimusho, however, can steal talent from smaller ones. We saw this with Kanno Miho, for example, leaving the small Tani Promotion to enter big player Kenon.

Like most aspects of the “closed” jimusho world, this blacklist is rarely detailed in specific terms. The case of mega-star Suzuki Ami, however, offered a very strong example of the blacklist in action. As reported by Steve McClure in Billboard, Suzuki attempted to leave her management company AG Communications after its CEO Yamada Eiji was arrested for tax evasion. Her parents cited “damage to her reputation” and received legal approval to break her contract with AG. Despite the legal right to go independent, the industry appeared to have conspired behind-the-scenes to punish her actions. All her advertising contracts mysteriously dried up, and later when she released her own music, she could not find basic distribution for the CDs nor television airplay. In effect, she was frozen out of the industry. She only came back in once she signed a new deal years later with Avex Entertainment. Not all blacklists are permanent, but they can “disappear” a star right at his/her peak, which is normally a death blow to a long-term career. Suzuki Ami never really recovered.

Cabal-like blacklists like this fail in most markets because there is such high incentive for companies to “break” the agreement and steal the profitable talent. The strongest jimushos’ power over the market, however, may be adequate to scare away anyone who wishes to scoop up ronin talent. And the blacklisting may not require wholly negative action. For example, YouTube star Magibon recently made allegations that her former jimusho would call up and offer Magibon’s clients their pick of the agency’s stable of famous stars to work in the place of Magibon. This could be considered a “positively-reinforced” blacklist.

The end result of this labor relation between talent and their jimusho is that the management company has full control over their salaried employees. And with the jimusho world working together to discourage movement, talent cannot use labor mobility as a way to break the agencies’ power. And with investments into master tape production, jimusho do not just hold power of their talent but within the industry as a whole. We will look at the source of jimusho power in later installments.

By Masayuki Kurokawa -nextmaruni project designer

* it is the reference presentation for designers and applicants of Competition.

1. Totality in details: Bi

I believe that it is precisely the details (bi) that embrace the whole. In terms of people, the idea is that overall harmony is obtained not by people being aware of sin as determined by God, but by their possession of feelings and consideration for others in forms such as shame and obligation, in other words by the individuals who constitute the minutiae of society possessing a social nature.
In terms of space, the whole world is concentrated in specific, individual places represented in accordance with where specific individuals happen to be located in terms of “here” and “there”. On the level of time too, individual moments constituting “now” are bound up with the past and the future.
In the West there is the idea that God is present in the finest details, but in Japan the idea is that it is precisely the finest details that house the whole. The details are not a part of the whole but incorporate the whole within. This is why the sukiya[*1] —the hut in which the tea ceremony is held— is thought of as a space constituting a microcosm of the whole universe. The sukiya[*1] projects itself radially out into the garden and further from the garden into the landscape beyond, thus eventually encompassing the whole of the world in its grasp.
In society it is the individual; in a village it is the individual buildings; in space it is “here” and “there”; in the case of time it is the moment represented by “now” that embraces the totality.

Despite the fact that the garden lies outside the sukiya[*1], every attention is paid to its finest detail in the same manner as the space inside the room. Every corner of the garden is considered to possess the same value as the world itself.

The sukiya[*1] incorporates within its internal space every aspect of the landscape seen from where the tea master is seated and including the room interior, the garden, the outside area, the view in the distance, and out into the universe itself in the manner of a skewer extending progressively outside from within the room.

The world thus expands from the room out to the outer corridor, the garden and further into the landscape beyond the grounds of the property, resulting in the gradual layered expansion of the world from a single point inside the room. The Japanese awareness of space is that the outward expansion of space conversely comes to incorporate everything, including the universe itself. A single point is thus a concentration of the whole world.

2. Parallel aggregation of details: Hei

It is precisely because the whole is present in the details that the details are able to keep their distance from one another and harmonize in the form of an aggregate consisting of details alone. If the details are merely parts of the whole, they will need to be mediated by an infrastructure, but they are able to coexist on their own as details when organized in parallel. Parallelism (hei) refers to a flat structure without layers, but, in the case of such an organization, the individual details will never get sacrificed to the whole.
In distinction to structures possessing normative values, such as God for instance, the structure of Japanese values is such that norms are created by factors such as consideration and shame that come into play between individual people. This is the mechanism whereby parallel relationships are maintained, and this is how one thing is able to harmonize with another while keeping an appropriate distance.
One might compare the structure of Western cities with their infrastructures as being like a tree, in contrast to which a Japanese village is laid out in the manner of a parallel network. The human brain is similarly organized as a parallel network of neurons, and the world created by the Internet is likewise a parallel network of individuals. Parallel relationships are what democracy is all about.

Japanese spaces are such that each and every one of the details is considered to be of equal importance, and they possess a structure in which perspectives obtained from a variety of individual details are able to coexist in parallel.

The cells, or neurons, in the human brain are independent, scattered units existing in parallel. They establish connections by means of stimuli on each occasion as required.

The Kanazawa 21st Century Museum of Art designed by Kazuyo Sejima is made up of a parallel assembly of rectangular exhibition rooms set inside a circular outer wall made of glass. The inside of the museum is arranged exactly like a village, consisting as it does of exhibition rooms which maintain their distance one from the other. Exhibitions can be held by freely linking the individual rooms.

3. Intimations created by details in their vicinity: Ki

There are two points of departure for architecture: caves and pillars. Caves form clear, tangible spaces inside themselves, whereas pillars form spaces with intimations of vagueness and uncertainty. Japanese architecture came into being as space formed by pillars. This is why there is no concept of the room in Japanese traditional architecture; space is entirely vague and uncertain, partitioned off by means of sliding doors (fusuma and shoji). Both people and things are imbued with such intimations, and Japanese awareness of things and people includes the surrounding space. Japanese people place the greatest importance on this vague atmosphere generated by people and things. The consciousness possessed by Japanese people may seem to be lacking in any firm sense of self and to be devoid of autonomy, but this is because the Japanese consciousness is a manifestation of this spirit of intimation and places importance on the continuity of intimations with others. It is this sense that gives rise to the idea of ma.
Modern architecture created pillar and beam structures in which walls are freed from structures, as typified by the domino system, but the starting point for this development is the space of vital energy created by these pillars as they are used in Japanese wooden architecture. As in the case of Japanese traditional architecture, there was from the outset a type of architecture created by intimations alone whereby structures are formed exclusively by pillars and beams and space is not enclosed as within a cave. This is the aesthetic created by the culture of building in wood.

There are two basic forms of architecture, caves and pillars. Pillars possess intimations in their vicinity, and people feel a sense of security when enveloped in such intimations.
Japanese architecture is based essentially on ma, manifested through the intimations created by pillars.
Japanese houses tend to be open, fluid and continuous and not to distinguish between inside and outside. The freedom of Japanese houses is a product of this structure based on the use of pillars and beams.

Western architecture takes the cave as its starting point, while Japanese architecture begins with pillars. Japanese traditional architecture entails spaces created by the intimations formed by pillars and beams.

Spaces created by intimation are fluid and contain no opposition between inside and outside.

4. Mutual harmony created by the appearance of details: Ma

Social harmony in Japan is created by factors connected with the way that people relate to others, for example feelings of consideration and shame. In order for people to coexist and harmonize with one another, norms based on absolute values are employed in monotheistic societies, but such norms do not arise in a polytheistic country such as Japan where gods have traditionally been thought to exist in nature and in things themselves. The key to obtaining harmony so as to facilitate coexistence between people is consideration for others. For Japanese people, who have an aversion to shame, who value harmony, who place importance on obligation, and who, in generalized terms, take joy in the fusion with nature, it is precisely this distancing with things and with nature that provides an important norm under which they can lead their lives.
As in the case of relationships between people, things, sounds and pictures are arranged in such a manner as to place importance upon their mutual distancing. This is considered to be the way in which harmony can be obtained through the world as a whole. The space required for obtaining this harmony is known in Japanese as ma.
Ma is created by those appearances that one might refer to as “consideration” or “allure” that appear in the vicinity of people, things, sounds and pictures. The sense of shame and harmony gives rise to the appearances generated by people. These appearances respond to the appearances of other people, things, sounds and pictures and harmonize with them. This concept of ma is unlikely to emerge in the Western world, where absolutism is the dominating principle.

The names, the existence, and the periphery of separate parts of the world are unclear. It is not clear precisely where a mountain ends. People possess a sense of appearances and territory in their vicinity, and there are no clear borders existing between people and things. Ma results from this gathering together of appearances on the periphery.

Where a person’s bottom ends is unclear. The bottom is vaguely linked to the back. The beauty of a woman’s body lies in this sense of ma projected by this vagueness of meaning.

In his picture entitled “Pine Forest” (Shorin-zu), Hasegawa Tohaku sets out in parallel two pine forests with vaguely delineated peripheries, with the result that the empty space between them gives rise to a mysterious sense of space. This is the power of ma.

5. Splendor created through concealment: Hi

Japanese people place importance on mutually connected overall harmony by means of consideration paid to others. Accordingly, expression is judged on the basis of the reaction it is likely to provoke in the mind of the recipient. Expression of beauty and strength of artistic impression are not things that need to be stressed; the idea is that efforts should be made so that such reactions are forthcoming from within the minds of the people who come into contact with the work in question.
No work of art is necessarily interpreted by the recipient in accordance with the intentions of the artist. The recipient interprets the work in the light of his own beliefs and mood. This can be regarded as the way in which the recipient takes part in the very creation of the work. The important matter lies on the side of the thoughts and feelings generated in the mind of the person who comes into contact with the work.
In this way, it is precisely by suppressing and concealing the main point of a work that it becomes possible for the recipient to play his own spontaneous part in the creative process. What happens as a result is that the form of expression becomes vaguer rather than clear, the work stimulates the recipient’s imagination, and it becomes depicted under the effect of the autonomously exerted imaginative power of the recipient. Zeami[*2]’s famous maxim Hi sureba hana (“The flower emerges through concealment”) refers to this process.

The interiors of traditional Japanese houses are spaces created with lavish materials from which all superfluities are rigorously excluded. The partitions known as sudare break up space in a vague manner and have a sparkling sense of mystery similar to being caught up in mist.

This shows a typical interior space of a Japanese traditional house. In the background can be seen the outer wall made of movable wood and paper known as akari-shoji. The things and people seen reflected on the wall look beautiful against the light. The floor also shines against the light, creating a lavish interior space.

This is a watch designed by Masayuki Kurokawa. While pursuing the limits of simplification, it also shows evidence of intricate detail, evoked especially by the sense of mistiness generated by the vague frosted glass and the mirror face.

6. The world was originally harmonious: So

There is an intrinsic belief among Japanese people that nature is in essence harmonious. The Japanese approach to nature is not confrontational, and importance is placed on an appropriate distancing from nature, which sometimes causes us harm and at other times brings us its blessings. This is the same sense as evident in the distancing that Japanese people set between themselves and others.
While distancing themselves from nature, people form part of the harmony of nature and they sense that unadulterated nature is a wonderful thing in its own right. Accordingly, nature should as far as possible be left to its own devices, an attitude which provokes a dislike of fiddling around with nature.
A kimono is a garment consisting of fabric which has been shaped with the most minimal degree of cutting and sewing, while a furoshiki cloth consists of a single piece of fabric which can be used to wrap objects of any shape whatsoever. The sukiya[*1] forms part of a continuum that links the room itself with the garden. The series of garments design by Issey Miyake[*3] under the title of Ichimai no nuno were produced merely by cutting “single sheets of cloth” and attaching sleeves.
The Japanese climate, in which each of the four seasons make themselves clearly felt, might be considered to be the background to which this approach to “nature as it is” emerged. The sukiya[*1] is not set up in opposition to nature, and the garden is considered to form part of the sukiya[*1]. This approach surely comes from the intrinsic awareness that the world was originally harmonious.

Japanese houses are made from wood, bamboo, earth and paper. It would seem that an attempt is being made to fuse with nature through the use of materials in their pristine form. Repaired walls are made use of to reflect their natural beauty.

On the left we see the stencil used to produce a Japanese kimono and on the right is a stencil of the type used in the production of Western clothing. The black sections are discarded, but, in the case of the Japanese kimono, there are almost no sections of discarded cloth. This shows how the kimono is made using fabric in its natural state.

This is an example of a garment from the Ichimai no nuno series designed by Issey Miyake[*3]. It has been produced with almost no additions made to the cloth, merely by cutting the fabric in two places and then adding sleeves to it.

7. Flowing beauty with no resistance: Ka

Human life and the universe continue to mutate constantly and are thought of as essentially impermanent. This sense surely originates in the Japanese climate, with its strong sensation of the four seasons. Spring eventually turns into summer, which in turn gives way to autumn and winter, when life temporarily sleeps. The Japanese aesthetic of impermanence is a reflection of such changes.
Moreover, this vivid sense of constant mutation is by no means conceived negatively: on the contrary, people take pleasure in entrusting themselves into this flow of constant change.
Houses made out of preference from easily inflammable, easily decaying materials such as wood, bamboo, earth and paper rather than from permanent materials such as stone, and devices such as fusuma sliding doors and byobu folding screens, which are movable and form part of a continuum with the area outside the space in which they are located, possess an uncertain quality which the Japanese aesthetic is happy to subsume.
The sense of the temporary and transient (ka) reflects a willingness to live positively by entrusting oneself to the flow of nature while at the same distancing oneself appropriately from nature. It comes not from a feeling of being resigned for the time being to the way things are but from a view of the universe and a sense of order which accepts that everything is essentially temporary and transient.
We see here an aesthetic awareness that is prepared to accept things as they are and is willing to trust to the flow of nature. This approach is wholly different from that adopted in the West, where life is conceived as being led in opposition to nature.

The sukiya[*1] is a building made principally from wood, bamboo, earth and paper which is able to evolve naturally through its fusion with nature. We see here the spirit of taking pleasure in natural decay rather than any aspiration toward permanence.

This is a typical interior space in a traditional Japanese house. As in the case of the akari-shoji doors which constitute the outer walls, the fusuma sliding doors, which partition off the interior space, are made of paper. The idea is of a temporary space in which the interior space as a whole is linked to the outside.

This is a ryurei (a table with a seat as used in performance of the tea ceremony) designed by Masayuki Kurokawa. It is a piece of furniture made of an akari-shoji in the manner of a traditional Japanese house turned inside out. Made from wood and paper, it lets in light and serves itself to provide light. If a tabletop made of washi paper gets dirty or breaks, it can be simply replaced.

8. Destruction is creation: Ha

There is another aesthetic approach that exists side by side with the approach that emerged from this way of living in which people are prepared to entrust their lives to the flow of nature. This other approach is based on the belief that creativity becomes possible precisely by resisting and destroying existing concepts and preconceptions that people have previously created. The aesthetic concept of ha (“destruction”) has invigorated and revitalized the other Japanese aesthetic that I have described here.
The idea of ha as it appears in the tripartite concepts jo-ha-kyu and shu-ha-ri[*4] is a revolutionary one. In this context it is considered to be a device that interrupts (destroys) the current flow and permits a major leap forward.
The idea is that life forces are stimulated by defiance and are realized precisely through the process of destruction.
Catastrophe is a vital force which comes into being at the moment of destruction, and the idea that it was destruction itself that constituted the essence of beauty was present in the sukiya[*1] tea huts created by Sen no Rikyu in the middle of the 16th century. The idea of displacing modules, copying the image of a ramshackle cottage, and using the most basic and elementary materials and forms of expression constituted a form of resistance to the military samurai class, who placed importance on extravagance and order.
Ha might be described as a kind of life-inducing device that lurks behind Japanese ways of thought.

The sukiya[*1] was a message of revolt directed by the merchant Sen no Rikyu against Toyotomi Hideyoshi, who stood at the pinnacle of the military class. This destructive message directed against the ruling class resulted in the establishment of one of the key aspects of the Japanese aesthetic.

Cherry blossoms are manifestations of the Japanese aesthetic not at the moment they come into full bloom but when they begin to fall. The vicissitudes of nature symbolize death and, at the same time, the advent of a new season.

A chair designed by Shiro Kuramata. One senses the designer’s strongly destructive intent, which suggests revolt against the very nature of being.

*1：The sukiya/ was a type of building generally in the form of a hut used in the performance of the tea ceremony and originally devised by Sen no Rikyu in the middle of the 16th century.
*2：Zeami/ A celebrated playwright and theoretician of the Noh theatre, author of the aesthetic treatise on the Noh theater entitled Fushi-kaden, who was born around the middle of the 14th century.
*3：Issey Miyake/ One of Japan’s foremost contemporary fashion designers.
*4：Jo-ha-kyu and shu-ha-ri/ The aesthetic concept of jo-ha-kyu is the principle of acceleration used in Gagaku and other forms of Japanese traditional music. Shu-ha-kyu denotes the three-stage principle underlying traditional study methods whereby the student initially adheres to the knowledge he acquires from his teacher and then discovers himself by breaking away from this knowledge and creating his own unique world.

TOKYO — The broiled meat is tender and the rice is silky-smooth. But as Japan’s economic recovery falters, beef bowls have come to symbolize one of its most pressing woes: deflation.

Japan’s big three beef bowl restaurant chains, the country’s answer to hamburger giants like McDonald’s, are in a price war. It is a sign, many people say, of the dire state of Japan’s economy that even dirt-cheap beef bowl restaurants must slash their already low prices to keep customers.

The battle has also come to epitomize a destructive pattern repeated across Japan’s economy. By cutting prices hastily and aggressively to attract consumers, critics say, restaurants decimate profits, squeeze workers’ pay and drive the weak out of business — a deflationary cycle that threatens the nation’s economy.

“These cutthroat price wars could usher in another recessionary hell,” the influential economist Noriko Hama wrote in a magazine article that has won much attention. “If we all got used to spending just 250 yen for every meal, then meals priced respectably will soon become too expensive,” she said. “When you buy something cheap, you lower the value of your own life.”

Deflation — defined as a decline in the prices of goods and services — is back in Japan as it struggles to shake off the effects of its worst recession since World War II.

While prices have fallen elsewhere during the global economic crisis, deflation has been the most persistent here: consumer prices among industrialized economies rose by a robust 1.3 percent in the year to November, but fell 1.9 percent in Japan.

In the decline, companies that undercut rivals too aggressively are being chastised as reckless at best, or as traitors undermining the country’s recovery at worst. Every markdown of beef bowl prices by the big three restaurants — Sukiya, Yoshinoya and Matsuya — has been promptly broadcast by the national news media here.

Japan has reason to be worried. Deflation hampered Japan from the mid-1990s, after the collapse of its bubble economy, to at least 2005. Households held back spending on big-ticket goods, knowing they would only get cheaper. Companies were unsure of how much to invest. At the time, the three beef bowl chains were in a similar price war.

Still, government officials back then emphasized the supposed benefits of deflation; falling prices were good for households, they said. Others said deflation would help restructure the economy by weeding out weak companies.

But the drawn-out deflationary cycle weighed heavily on Japan’s recovery. Apart from putting a damper on consumption and investment, asset deflation ravaged the country’s banks and shut out new businesses from credit.

Now that deflation is back, Japan is wary. Unemployment remains near record highs, and wages are falling. Mounting public debt is also a problem, causing Standard & Poor’s on Tuesday to cut its outlook for Japan’s sovereign rating for the first time since 2002. Japan must do more to lift its economy out of deflation and bolster long-term growth, S.& P. said.

Moreover, the population is shrinking, making demand inherently weak. Economists say Japan’s economy is saddled with a 35 trillion yen, or $388 billion, “demand gap,” or almost 7 percent of the country’s economic output.

“With supply continuing to exceed demand by a massive margin, deflationary expectations are proving very difficult to shake,” said Ryutaro Kono, an economist at BNP Paribas in Tokyo. “Households have been tightening their purse strings as the income outlook looks increasingly bleak, and we believe firms will continue to respond by lowering prices.”

Matsuya, the smallest of the three chains, set off the price war by cutting the price of its standard beef bowl to 320 yen, or $3.55, from 380 yen in early December. The market leader, Sukiya, followed suit that month, lowering its price to 280 yen, from 330 yen.

This month, the No. 2 beef bowl chain, Yoshinoya, lowered the price of its beef bowl to 300 yen, from 380 yen, though it says the cut is temporary. A smaller chain, Nakau, has also lowered prices.

The restaurant chains insist they have not downsized their portions, and will make up for cheaper prices by raising efficiency.

“We don’t consider this a price cut. We’ve simply set a new price,” said Naoki Fujita at Zensho, which runs the Sukiya chain. “With incomes falling, we needed to figure out what would be a reasonable price,” he said. “We hope customers who came every week will now come twice a week.”

In a sense, the beef bowl has always been about low prices. Yoshinoya, the beef bowl pioneer with about 1,560 stores in Japan and overseas, helped bring beef to the Japanese working class with its first restaurant in the Nihonbashi district of Tokyo in 1899.

Though beef was a delicacy at the time, Eikichi Matsuda, the Yoshinoya founder, kept prices cheap by buying in bulk, and serving as many customers as possible from his tiny stall. Speed and efficiency reigned, with workers trained to start preparing a bowl even before a customer sat down.

The same principles still apply at Yoshinoya. At a branch in central Tokyo, servers rarely take more than a minute to fill an order. The average customer spends just 7.5 minutes on a meal, and a small restaurant can serve more than 3,000 customers a day.

But forced to sell at ever-lower prices — and hurt by lower-priced competitors — making a profit has been increasingly difficult. The company suffered a 2.3 billion yen net loss in the nine months to November, and the next month, before Yoshinoya slashed prices, its sales slumped 22.2 percent. In contrast, sales at Sukiya, which serves up the cheapest beef bowl, surged 15.9 percent that month from the previous year.

Yoshinoya is not considering further price cuts. Squeezing out more savings is “like wringing a dry towel,” said a spokesman, Haruhiko Kizu.

Meanwhile, labor disputes at Sukiya show how falling prices and revenue can quickly hurt workers. A string of former workers have sued the chain over withholding overtime pay. Sukiya denies the accusations.

Other companies have been harshly criticized for slashing prices. Fast Retailing, the company behind the fast-growing Uniqlo brand, has garnered as much disapproval as awe for selling jeans as low as 990 yen. McDonald’s, on the other hand, has won kudos for resisting bargain basement prices by introducing a series of big “American-style” burgers for more than 400 yen, considered expensive in today’s Japan.

“Some Japanese companies are waging such reckless price wars, they’re wringing their own necks,” said Masamitsu Sakurai, who heads the influential business lobby Keizai Doyukai. “Companies need to be more creative. They should come up with products that add value.”

Economists say it is absurd to blame individual companies for Japan’s deflation. “For prices to fall during an economic downturn is natural. That stimulates demand and facilitates an eventual recovery,” said Takuji Aida, chief economist for UBS in Tokyo. “But this mechanism doesn’t work when there is such a big demand shortfall.”

“When prices fall because of an increase in productivity at a company, it’s good for the economy,” said Sean Yokota, an economist for UBS based in Tokyo. “It’s the demand gap that’s damaging.”

The government has vowed to lift household incomes through a series of subsidies, including new cash payments to families with small children. But the scale of government payments — 2.3 trillion yen in the case of the child subsidies — is hardly enough to fill the nation’s huge demand shortfall. With interest rates close to zero, Japan also has few options left in monetary policy.

In the meantime, cutthroat price battles are already driving laggards out of business. Wendy’s, the American burger chain, left Japan on Dec. 31.

It is not surprising, considering the competition. A mere stone’s throw from Tokyo’s celebrated Ginza district is Shokuan, the kind of restaurant that is undercutting everyone.

Shokuan, which has no chairs nor table service, is a cluster of beer vending machines huddled under the train tracks. A man behind a tiny counter sells dirt-cheap morsels: fish sausages for 50 yen, prawn crackers for 60 yen, canned yakitori for 160 yen. Many days of the week, Shokuan is spilling over with customers.

“I don’t think there’s anything around here cheaper than this. That’s why I started to come,” said Yasunori Miura, a manufacturing company employee and a recent regular. “This here,” he said, pointing to his fish sausage, “is deflation.”