The ones in resort towns seem to always have “no foreigners” signs in English…I guess to avoid having any awkward denials at all. Seems perfectly legal to not serve foreigners, in any case.
This is not to say there is no racism in Japan, but for resorts it's most likely they don't have the capacity to help in English/Foreign Language.
If it's some seedy thing, like a cheap/seedy bar, karaoke, J/KTV or sexual services then it's both, no English and they want discretion.