Some shop shelves are bare and stores are trumpeting the arrival of new supplies with posters in the windows announcing "We have butter!"
With Christmas cake-baking season fast approaching, social media has been abuzz over the shortage, with Twitter user @justastarter1 claiming to be a "butter refugee" after trailing between shops without success.
The agriculture ministry said the problem is linked to a broiling summer that left the nation's cows exhausted and unable -- or unwilling -- to generate their usual milk supply.
The bovine strike has sapped supply just as dairy farmers trim their herds to cope with Japan's dwindling population and falling demand.
And with farmers prioritising supply for liquid milk to keep the supermarket shelves stocked, Japan now faces a shortage in the raw material used to produce butter -- popular among home bakers.
In a bid to try and keep the nation's kitchens operating, the government in May imported 7,000 tons of butter, and a further 3,000 tons in September, the first time in years Tokyo has raided foreign dairy markets.
"Judging from inventory levels at the end of September, stockpiles are down 30 percent from a year earlier so we're in a shortage trend," said an agriculture ministry official.
But not many farmers are willing to raise milk production, the official added.
"They are concerned about where the dairy farming industry will go in the future as they see feed prices soaring," he said.
A sharply weaker yen has sent the price of imported feed grain skyward.
Japan's raw milk production was 7.45 million tons in the year ended in March, down 14 percent from the peak year 19 years ago, according to government data.
