Tbh I’d say they’re way less cash-based than believe to be. Obviously just my experience but most places take visa or Suica from Tokyo to Hiroshima to Kanazawa and everything in between.
But a lot of small Japanese business, particularly in food/drinks, do not. PayPay and such are making some inroads in that space, but I know bar owners here who got rid of it as it wasn't worth their take/fees.