Is the cost of housing just much cheaper than people expect it to be or what? I'm surprised to hear it's lower than Atlanta which is where I currently live.
One reason, I think, for this misunderstanding is that Tokyo is laid out quite differently from American cities. Space is used very efficiently and you can live quite far from central Shibuya / Shinjuku / Chuo while maintaining a 20-30 minute commute by train.
Another factor is that in Tokyo, most people do not own a car. Commuting by train is significantly cheaper than owning a car, and many companies will even pay for your train pass.
I can find those same jobs for 2x the salary in Atlanta any day of the week.
That said, many companies that hire American SWEs tend to pay better, especially if you have experience working at a big Silicon Valley tech company. Pre-covid there were quite a few job postings for senior developers above the $100k usd mark, which will get you quite far in Tokyo.
Things are also different because relatively few married women are in the work force. From that, you could say that the average pay in Japan is much higher. In the US, wages stagnated for a couple decades and cost of living skyrocketed in the US as women entered the work force until it now takes 2 salaries to stay afloat vs only one in Japan (we'll exclude the unofficially high poverty rates).
At the same time, US workers put in 41.3 hours per week for men and 36.3 hours per week for women (working 14% less time accounts for an enormous part of the earning difference between the sexes). In contrast, while the law officially puts the work day at 8 hours with statutory paid leave going up to about 3 weeks, most workers take little to no vacation and "voluntarily" work many more days and 30-50% longer hours per day than the US worker (though at the same time, productivity per hour may not always be high).