This is an amazing deal considering what I paid to go to Japan... I was there for two weeks living with another family. Mind you, I didn't have to pay for any of my food but I paid for airfare and bus fare on the required tours we took (I was there for International Club at my HS). It cost me well over 1k to go. I don't know exact numbers but I know it was over one grand.
Food, train fare, and bus fare isn't too expensive over there but still can add up. You also have to know where you are going and how to get there. A lot of places have English translations under anything Japanese and the trains translate themselves (or they did where I was...). They are all very nice people and have no issue speaking English to you if they know it. Little children will only ever try and speak English to you if you talk to them and hardly ever revert to Japanese since they are learning English as a second language...
It's very homy over there and if you have the money, I would say go for it. But don't go alone. Japan is an easy place to get lost in if you can't read Japanese. :/