Prior to 2005, everyone in Japan had to learn and pass the driver's test using a manual transmission car. Since those cars were cheaper and -- at the time -- had better fuel economy, they were more popular.
Since 2005, there has been a revision to the automobile license law that allows for "AT-only" driver's licenses for people who wish to take the test using an automatic transmission car. This is also because of the growing popularity of automatic transmissions and the fact that many automatic transmissions such as CVT as well as hybrids can get better fuel mileage than a regular driver with a manual transmission.
As a result, rental car companies have shifted their fleets over to automatic -- given that younger people tend to be the people who rent, and are also the people most likely to have AT-only licenses.
I've rented quite often in Japan (including Hokkaido) and have always been put in an automatic transmission car. I'm sure if you looked hard, and especially at non-chain rental companies, you'll find a manual transmission car (especially if you want to rent a light truck / pickup).