The weary foreign traveler looking for Western-sized comforts in a hotel would not find the Mitaka First Inn an appealing place to spend a night.

A "room" there is not called a room at all but a "life capsule." And, as the term suggests, it is confining. It measures 2.3 square yards, about the size of the old Pullman berth on American trains in their heyday. One crawls into it, just as one used to crawl into a Pullman berth, pulls the curtain for privacy and clicks on a miniature television set.

Claustrophobic people would hate it, but the capsules in the Mitaka First Inn are in great demand. The charge is only $11 a night, half the cost of a cheap business hotel room and about one-tenth what it takes to get a room of what Americans would reguard as requisite size.

The weekly occupancy rate is 95 percent, and more than half the customers are regulars who spend three or four nights a week in their rent-a-capsule to avoid long trips between office and home during the week.

The Mitaka First Inn symbolizes Japan's biggest problem -- space. The lack of it in this country of islands -- two-thirds of which is forested and mountainous so that the population crowds onto the coastal plains -- affects life here the same way that abundant space has been a major determinant of Americans life and behavior.

The extended family, for example, with perhaps three generations under one roof, is still the rule in Japan, and not merely for reasons of familial affection. The young couple cannot possibly afford a new house in the suburbs, so they live on the parental home.

Or consider the middle-aged office worker who has managed to put together the cash for his dream house or for the less desirable "mansion," which is, inexplicably, what the Japanese call the cramped apartments popular now. Tiny by Western standards, they are also located far from the place of work, which means long-distance commuting six days a week.

A recent Construction Ministry survey found that the average company employe will spend an hour-and-a-half to two hours getting to work each morning. That can add up to 24 hours a week of commuting, and the result is something like the Mitaka First Inn, where the office worker spends weeknights to avoid the long trips to the long saved-for home.

Masters of miniaturization, the Japanese have devised ingenious ways of combatting their space problems, or at least living with them.

Hundreds of thousands of mom-and-pop stores survive in a land of high rents because the tiny shops are both business and residence. Mom and Pop Suzuki sell their wares from a cramped showroom facing the sidewalk and live with their children in a couple of equally cramped rooms in the back.

And where do all the cars go downtown when they aren't being driven? They are neatly packed into minuscule garages. A car goes off the street onto a mechanized turntable that spins it into position for delivery into a moving rack that stores it for the day.

Press a button and the car rolls out. Thirty cars are stored each day in one of the parking contraptions along Tokyo's main thoroughfare that has only about 20 feet of street frontage.

Japan's postwar economic boom was a dream come true for the real estate speculator who could charge more and more for packing people into smaller and smaller spaces. Land costs and rentals rise at staggering rates each year.

The typical "mansion," an apartment condominium, consists of three tiny rooms (nine or 10 feet square) and a combination kitchen-living room. It costs $120,000 now. A detached home of the same size would cost twice as much if it could be found two hours' commuting distance from downtown Tokyo. A newspapewr columnist recently calculated that at current prices it would take the average office worker a hundred years to buy his home in the suburbs.

Tokyo newspapers have discovered a convenient guage for measuring the rising land values: the Takana fruit parlor in the high-priced Shinjuku district of the city.

Each year, the national taxation administration discloses the assessed value of Mr. Takano's fruit stall, which reporters invariably describe as Japan's "most expensive land." Last year, Takano's property was worth 3.7 million yen, or $15,880 per square yard. That was a 15 percent increase over the year before.

Among themselves, Japanese bear stoically cramped quarters that their crowded islands demand. But they bristle at foreigners' comment.

A couple of years ago, a European economic organization produced a working paper designed to explain the circumstances here. The author, who apparently thought his prose would be filed and forgotten, described typical Japanese homes as little more than "rabbit hutches." Someone leaked the paper to a reporter and the phrase made headlines in Tokyo.

It still rankles Tokyo residents. When a businessman recently finished describing one of Japan's many economic success stories, a venture of which he is enormously proud, he added, somewhat apologetically: "Of course, we do still live in rabbit hutches."