I wonder if this had more to do with budget belt tightening due to the COVID caused economic crisis than concerns from local residents about hosting the system:
The Defense Ministry is halting its plan to deploy the Aegis Ashore land-based missile defense system in Japan, Defense Minister Taro Kono said Monday, citing costs and technical problems.
The move comes a month after the government gave up on deploying the cutting-edge missile defense system to a Self-Defense Forces compound in the city of Akita, following strong opposition from local residents. Kono reported the latest plan to Prime Minister Shinzo Abe last Friday, he said.
In January 2019, the U.S. agreed to sell two Aegis Ashore missile defense systems and other military equipment to Japan at an estimated cost of $2.15 billion (about ¥231 billion).
The Defense Ministry had planned to install two Aegis Ashore systems in Akita Prefecture in eastern Japan and Yamaguchi Prefecture in western Japan sometime after the fiscal year starting April 2025 so that all of Japan was covered by the missile defense systems.
Japan Times
You can read more at the link, but North Korea and China should be happy to see this development.