Times are tough for the yakuza, as members of Japan's resilient underworld are known. An eight-month gang war has caused a wave of arrests and upset their money-making routine. Two senior yakuza are awaiting trial in Hawaii after being caught in what their lawyer described as a sting operation by U.S. federal agents last month.

But there is no sign of distress on the face of a cropped-haired gentleman in a brown double-breasted suit as two visitors are shown into the room where he is sitting. He stands, smiles cordially and reaches for his calling card.

It is a rather elaborate one, done in traditional brush calligraphy. It identifies him as assistant deputy chief of the Takumi-gumi, one of the larger of 300 underworld gangs operating here in Japan's third-largest city. Address and phone number of gang headquarters are provided on the back.

He has taken time from gang duties to explain the yakuza life style and the feudal code of honor that they say governs their existence.

"I joined this world at the age of 16," he said with visible pride. He is now 42. "My life is here, and I have no regrets."

He is asked how he lost half of his left little finger. He wiggled what is left and explained that, in line with yakuza tradition, he cut it off in 1982 and delivered it to the man who headed the gang he belonged to then. He needed to demonstrate remorse for leading the defection of 11 members to another group.

"I wanted to take responsibility," he recalled, adding, "It was sufficient payment."

The lone burglar or street-corner holdup man is virtually unknown in Japan. But police statistics show that at the end of 1984, there were 2,278 organized criminal gangs in existence, with 93,910 members. The Japanese feel best doing things in groups, and criminals are no exception.

Their country's overall crime rates are tiny when compared to those in the United States. But yakuza manage to do a mammoth business, about $5 billion in 1981, according to police estimates, in such traditional preserves of organized crime as drug dealing, prostitution, extortion, bookmaking and pornography.

Yakuza have definite ideas of how gangsters should look; that look is generally drawn from 1930s Hollywood. On the streets of Osaka, they can be picked out by their cropped heads, striped suits and diamond tie-clasps. The top men move around by imported limousine, usually Mercedes-Benz these days.

The whole point is to be recognized. In Japan, self- and community respect come from being part of an organization and society's down-and-outs seek it through the gangs.

"On the inside, they can cast off their loneliness and anxiety," said Yukio Yamanouchi, an Osaka lawyer who represents many yakuza.

Gangs function remarkably like the big companies to which millions of Japanese devote their lives. They maintain offices with the gang emblem displayed proudly in front. They provide lifetime employment. They organize celebrations for big events such as a member's wedding, sending out embossed invitations.

The Takumi-gumi assistant deputy chief said he went to work as an apprentice in a shop making women's kimonos after he graduated from junior high school.

"But I wasn't well behaved; I made trouble there. I looked at the other employes, and thought, 'They don't have much of a life. What can I do that's better?' At that time, I had a no-good friend, and he told me, 'Why not come to Osaka?' So, I came and got involved in this world . . . . In those days, if you wore a gang badge, you could go in any place for free."

Another man, a muscular 24-year-old who became a yakuza member eight years ago after running away from home, said, "The yakuza world has something warm to it.

"If you have no career or school credentials, you're seen as lower class," he said. "College graduates get the good jobs and treat you like dirt." He has now risen to be driver for the Takumi-gumi assistant deputy chief.

Publicity never stops. Leaders occasionally give press conferences. In 1981, Kobe was the scene of a limousine traffic jam as gang leaders arrived from around Japan for the funeral of Kazuo Taoka, the third man to be chief of the Yamaguchi-gumi, the largest federated gang in the country.

"We have no difficulty in identifying yakuza," observed an Osaka police detective. In his office is a thick commemorative book published by Yamaguchi-gumi when Masahisa Takenaka was named its fourth chief in June last year. Inside it are the names of all important members.

Police statistics show that yakuza ranks have declined by about half since reaching a peak of around 200,000 in 1963. But authorities have never been able to make good on their periodic pledges to "stamp out" the yakuza. Their roots run too deep.

In 1984, police arrested and prosecuted 49,519 yakuza, about half of their total ranks, but most were junior people. Strong internal loyalties and refusal to testify against one another make it next to impossible to get at the men in the limousines, police say.

Many people here say they have other protection too, such as connections with the upper echelons of Japanese politics or deals with local police. Police and yakuza are said to work out informal understandings that police will overlook some illegal activities in return for abstinence from others.

Much of the gangs' time is spent in providing goods and services that are unavailable legally.

People come to them to buy drugs or to bet on horse races. Small businessmen hire them to collect debts or recruit day laborers for construction sites.

Other work is straightforward extortion. One technique apparently pioneered in Japan is to buy a few shares in a company and then collect from management in return for not disrupting the annual shareholders' meeting. That practice is now illegal for managers as well as mobsters.

In recent years, authorities say, the gangs have begun branching into the United States. Los Angeles police have reported yakuza involvement in heroin trafficking, procuring of women for Japanese bars and brothels and loan-sharking.

Yakuza are simultaneously idolized in Japanese popular culture and scorned by mainstream society. Outside the headquarters compound of the Yamaguchi-gumi in Kobe, for instance, a citizens' group has posted a large sign reading, "Let's kick out the violent groups."

Yakuza do not deny that they commit crimes. But they say the true significance of their fraternity is the ritual, the preservation of do-or-die relationships and obligations that evolved in feudal Japan and have largely died out in the modernization that began more than a century ago.

The yakuza pledges his life to the gang chief. A symbolic father-son relationship is established. Adorned in a ceremonial kimono, the recruit receives a sake cup that affirms his unquestioning loyalty and the chief's commitment to protect him in troubled times. Many later cover their bodies with tattoos, marking them as members for life.

Going to prison is part of winning one's spurs. The man who reveals nothing to the police can expect to find his comrades lined up as an honor guard at the prison gate on his release.

Denigrators call it all mumbo-jumbo that exists only to justify brazen criminality.

It is said that whatever values there were have become corrupted to the point that the modern yakuza applies a local anesthetic before chopping off his little finger.

The current gang war suggests that loyalty as a virtue is slipping in the yakuza world. It began with a succession struggle that erupted inside the supposedly seamless Yamaguchi-gumi following the death of Taoka in 1981.

After long deliberations, Takenaka last year became the fourth chief, by some accounts through a coup d'etat. His rivals were enraged. A group headed by Hiroshi Yamamoto split off to form the Ichiwa-kai gang, taking many foot soldiers with them.

In January, Takenaka and two of his lieutenants were shot to death outside an Osaka apartment house. Ichiwa-kai was blamed, and the war was on.

Since then, police have recorded 188 clashes between the gangs, with 12 more deaths.

U.S. authorities said the yakuza arrested in Hawaii, one of whom was Takenaka's brother, were trying to obtain guns and a hand-held rocket launcher to use in settling these accounts.

The defendants have denied the charges, contending that it was entrapment. Yamanouchi, who is helping represent them, said they were lured to Hawaii after receiving a printed invitation card from a Mr. John Lee to attend an anniversary celebration of something called the "Brotherhood and Alliance of Families."

"They went because they thought it was a Mafia party," said Yamanouchi. "As Japanese, they thought, 'We're members of the same occupation. Why not go?' " Mr. John Lee turned out to be a federal undercover agent, he said.