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Japan has broader problems which are causing a fall in purchasing powers

Absolutely. It used to make the news when anything went up in price. Sometimes, for the case of a famous piece of candy or something, the president would even appear in a press conference apologizing for a 5-yen increase. Similarly, wages weren't really increasing for people all that much. Suddenly, Covid, Russia's invasion of Ukraine and its impact on energy, and a few other things hit at once. Prices have gone up and up. A lot of companies have not raised wages quickly enough. The yen also devalued against several currencies. These all led to a lower quality-of-life. The median pre-tax salary in Japan is around 5 million yen.

The impression I get is that izakayas are also old fashioned, so I bet they’re run by the very same kind of old fashioned people from humble origins who grew up back when Education was less universal, that run most restaurants in Portugal.

This can vary a lot. There are chains as well as mom-and-pop places. Some offer very high-tech environments with tablets for ordering and robots to delivery and take empties. This can cut some costs (many just have the tablets), but it only goes so far. This does also allow them to support English (and often Chinese, Korean, and sometimes others) for core menu items, but specials aren't always there. Others are still very traditional. There are probably a couple of izakaya that do cater to tourists, but not a lot. They also aren't generally what tourists are going for so I'm not sure that would be worth trying.

by pushing up house prices and the cost of living more broadly,

We have that in the big cities, particularly with AirBnB-like accommodations. Laws had to be made about them but enforcement is still poor. There are many operating illegally. It's made the news when an investor would buy an old building to turn it into one and raised rents on everyone to ridiculous levels to get them to move. This forces locals making those above-mentioned Japanese salaries (and many of whom are pensioners) into worse situations or prices them out of their areas entirely.

Home ownership in Japan is weird. In many places (outside of Tokyo and a couple other metros), housing is a depreciating asset where it's only down to the land value after 20 years and that land will go down in price in most of the country most of the time. Some people will buy condos instead of houses on their own land, but that comes with its own set of issues as well. We do have that as well, though. Some domestic, but a lot Chinese and from other countries as a source of investment income. This is one reason Japan has cracked down a lot on foreigners buying property and such in the last year and change.

Some places want to introduce two-tiered pricing for residents vs tourists. One complaint is that anyone who looks obviously-non-Japanese will likely get the foreigner treatment by default which I would not be looking forward to. Some companies jack up prices for greed, but that's capitalism I guess. Some do it because their rents get raised and they have less choice. Either way, higher prices price out locals and create more rage toward foreigners (some people forgetting that tourists and foreign residents are not the same thing (mostly racists)). This is even though the majority of foreigners living and working in Japan are making the same wages Japanese folks would which is not a ton (especially for those of us would like to visit our family every once in a while).

It's a weird and difficult situation. Many Japanese large companies are exporters that want to get paid in USD/EUR and have the JPY be weak when buying inputs. So, for the economy, the weak yen is good to a point. On the other hand, it's hurting other places (and the future in general, IMO, but that's just my impression). Japan also has a growing wealth-inequality problem and the weak yen and inflation are hurting people. It's obvious to people wishing to travel abroad or buy items from other countries, but less so to those who are just paying more for everyday goods that get imported (and/or shipped with imported energy/fuel, using plastics that rely on imported petroleum, etc.).

The government is cracking down on visas (in both good ways (to prevent companies from exploiting people and the system which can drive down wages) and bad (raising costs to be insane compared to the wages here)). They had a business manager visa that had laughably few restrictions and had a lot of people setting up 'businesses' but really just using it to live in Japan, but knee-jerked the other direction which has caused people living in Japan for years running their own businesses to come up with an exit plan as they will not meet the new requirements (previous: something like 5 million yen value and some other stuff to now: 30 million yen, requirement to hire full-time a Japanese national, spouse, or PR, and other education/language requirements).

The whole thing is a mess. I don't have a coherent conclusion to this. There are multiple problems with multiple factors and both good and bad reactions to them and proposed solutions. I guess we'll see what happens. I'm hoping the xenophobia and racist people and parties fail to show any real results and we can focus on the actual economic and social issues, but I won't hold my breath. I planned to live here forever. Bought a house, run a small farm in addition to my main job, invested, etc. I've been forced to have an exit plan in case things get worse for non-Japanese living here and/or they tank the economy totally.