In my experience (8 visits since 1994), it can be as expensive or cheap as you want. Certain things that are inexpensive in the USA are very expensive there, but the opposite also holds true. You can expect some sticker shock when you first arrive, although the last time I was there (2009) the prices for most things were fairly in line with the USA compared to the '90s.
Western-style hotels can be very pricey, but you can get good deals if you stay in a Japanese-style inn called
ryoukan. In some areas (ie: Kyoto) you can get cheap lodging in temples, but you are also expected to rise at dawn and join the monks in chanting, which might not be appealing to everyone.
Restaurants are usually very expensive, but when I visit Tokyo I buy my meals at convenience stores like 7-Eleven, Lawson, Sunkis, etc. Believe it or not, these stores sell fresh-made sushi, oden, rice balls (
onigiri), etc. and it is VERY good and VERY cheap. The larger subway stations in Tokyo have places where you can get a bowl of udon for a few bucks and it is excellent and filling. Japanese fast food restaurant are also kind of interesting... for example, a local hamburger chain with the unfortunate name Mos Burger (pronounced like "moss burger") also sells
gomoku kinpira, which is sauteed grated burdock root, seaweed, and veggies in a grilled rice cake bun (and delicious!).
In residential neighborhoods like Komagome (where my sister-in-law lived) there might be a narrow street with lots of independent shops specializing in different types of fresh, homemade prepared foods - one shop will have croquets, another will have tempura, a third will have sushi, etc. - and you can just buy a little bit at each one and make yourself a nice
bento (lunchbox). One thing I have discovered about the Japanese is they do not have lousy food anywhere. Pretty much anything you get there is delicious, but you need to keep an open mind because some of their cuisine is rather exotic by our standards.
As you might have gathered from Suzuki san's generous offer, Japanese people are EXTREMELY kind to western visitors. Many times I have been in stores and have gotten stuff for FREE just because I was a foreigner. Japan is a wonderful country and its citizens are equally wonderful - that's why I married one of them!