Together with the money you spend on transportation, the better part of your budget will be spent on the cost of accommodation.
But still, there are different types of accommodation in Japan. You have a choice of (business) hotels, traditional guesthouses or ryokans, family-owned guesthouses or minshuku, private homes, youth hostels,... And even in those categories you should be able to find lodging for even the smaller budgets, so don't despair !
If you stay in an expensive ryokan, meals are always included and most of the time there will be no reduction for meals not taken. In the cheaper ryokans meals are not automatically included. So you can always eat out and find a meal more fitting to your budget if you want. Of course, the Japanese-style meals provided in the ryokans are so delicious that it's hard to resist !
Don't let the looks of the buildings deceive you : sometimes it looks scrubby or modern from the outside, but inside you will see - without exception - clean and traditional rooms. It depends, some ryokans are in plain concrete buildings, just as a business hotel might be. Business hotels are a good option : centrally located, close to the railway station and reasonably priced.
How to use a Japanese style hotel ? Well, I couldn't explain it better myself, so just read this informative page and you'll be well prepared.
In almost all of the places I stayed at, following items were available in the room :
Try to get hold of one of the useful booklets, periodically edited by the Japanese Inn Group as well as by the Welcome Inn Reservation Center.
I also stayed at some private homes thanks to the Servas network.
Here are some of the places I stayed at, as well as some photos below so you get an idea what a typical room looks like.
More information on the different kinds of accommodation in Japan can be found at the websites listed below.
In some cases it is also possible to check room availability and make online reservations.