The price cut is aimed at boosting the launch of the machine and making it more competitive with the Xbox 360.
The price for the North American and European launch will stay the same.
The surprise move will see the 20 gigabyte version of the PS3 sell for 49,980 yen ($430) when it goes on sale on 11 November in Japan.
No changes to the price of the higher end model - 60GB version - or European and US prices were announced.
Gaming community
Sony has previously been criticised by the gaming community for the high cost of the new console. The lack of an announced price cut for the US and Europe markets may also raise some gamers' ire.
In the US, the system with a 20GB hard drive will cost $499, while a model with a 60GB drive will cost $599. European pricing is 499 and 599 euros respectively.
The new Japanese price puts the console in the same range as the basic Xbox 360 machine combined with an add-on HD-DVD player, which cost 49,600 yen together.
More At: BBC.COM
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