This is indeed quite a complicated question with many different interpretations. The matter of Japanese ethnogenesis understandably has produced conflicting scholarship, often tied towards nationalist narratives. I will attempt to keep things brief and simple, with my notes taken from Mark J. Hudson's Ruins of Identity: Ethnogenesis in the Japanese Islands.
Firstly, the modern development of the nation-state concept revolves around some shared common mass culture. This was a Eurocentric movement that originated around the 18th and 19th centuries. When looking at premodern societies, it's harder to define the identities and national consciousness. Preindustrial societies such as medieval Japan had major regionalism. Additionally, defining an ethnic collective was mainly the concern of the elite ruling aristocracy, for the purposes of unity and state-building.
Beginning around the Yayoi period, migrant groups from Korea and Northern Asia began to settle into the Japanese islands, intermingling and displacing the indigenous Jomon peoples. During periods of settling and colonizing, there tends to be a stronger consciousness of identity, especially in areas with prior populations. From this develops a core population of the Japanese people, though after a certain period of time, divisions tend to form into regional societies. Later on however, with stronger state building efforts, identity distinction once again becomes greater, as seen in the Kofun period with the development of the Yamato court. From this central authority stems the core identity of the people, distinguished from other groups on the islands. For example, the Kumaso/Hayato of Kyushu and the Emishi of northern Honshu. These groups themselves were not clear coherent ethnic groups, but rather generalized terms for barbarian tribes and clans that remained independent of the Imperial court. Critical of note here is that some of the peoples were genetically/biologically related to the core Yamato, others to the later Ainu ethnic group, themselves forming a more concrete identity around the 12th century.
Regarding the division between imperial subjects and barbarian outsiders, this suggests a strong socio-political relationship with the formation of identity. Now undoubtedly, Japan has been shaped heavily by the import of Chinese ideals. Like the Chinese, the Japanese had the notions of distinguishing the civilized from the uncivilized. The civilization-barbarian dichotomy preserves legitimacy and superiority for those in power. There is a tendency to identify oneself not with your own characteristics, but rather the exclusivity from the other, the stranger, the lesser barbarian. (Hence, for example, the upsurge in nationalistic sentiment during the Bakumatsu period). In addition, the Ritsuryo government, based on Confucian and Legalist systems, was introduced in the late 7th century and helped form the idea of a country or nation, in a time when the Imperial family was consolidating power, enjoying a period of luxury and prosperity, and attempting to construct their own state in the likes of China. At the time, the imperial government had influence over Kyushu, Shikoku, and Honshu, save for the northeastern Tohoku region that remained as a periphery. Later external threats, such as the Mongol invasions in the 13th century, also ingrained further distinguishing from the self and the foreigner.
By the unification of Japan under the Tokugawa regime, the numerous self-governing domains of the Sengoku period introduced new dynamics for the ruling powers. To maintain control over the realm, Tokugawa policies interestingly both fostered and undermined a national identity. The sankin kotai system dictated that domain lords must spent alternating years of residence between home and in the capital Edo, spurring nationwide exchange of culture. The safety and unity of the Edo period also saw unprecedented recreational travel and pilgrimages, producing cultural masterpieces from the likes of Basho and Hokusai. Urban centers like Edo and various large scale construction projects also saw the gathering of peoples and exchange and developing of culture. This all shaped a clearer idea of "Japaneseness" across the islands. However, local differences remained, the mountains, valleys, and islands of Japan's rugged terrain limited communities from each other. The Tozama distinction of daimyo who opposed Tokugawa power in the late Sengoku period also politically distanced certain clans away from the center.
Allen W. Johnson and Timothy Earle state in The Evolution of Human Societies: From Foraging to Agrarian State that Japan was:
"populated with communities ranging from simple to complex chiefdoms, with many areas not integrated beyond the family level or the local group. Under the relentless pressure of continuous population growth and its handservant, the intensification of production, the landscape filled in and the proportion of the countryside that was brought under chiefly control increased, as did the complexity of chiefdoms."
The decline of the Ritsuryo system and weakening of central authority saw greater regional independence, however, these chiefdoms or polities still politically derived from the emperor and the Kinai system. Moreover, they were still economically interrelated, and thus maintained some degree of unity and ties.
Takashi Fujitani also states in *Cultural Nationalism in East Asia: Representation and Identity:
“It is obvious to sensible historians today . . . that during the Tokugawa period the common people had [no] strong sense of national identity.”
This is an interesting claim, and attests to the idea that people were indeed more attached to their immediate surroundings than the greater realm, even if they understood it to be part of a main Japanese collective. That is to say, those that would have been aware of the outside or surrounding ethnic groups, such as the Ainu to the north. Therefore, this all points to the strong regional identities one would have placed themselves in, applicable to the Edo Period and in the preceding Sengoku period with feuding autonomies. It is unlikely one would have considered a neighboring domain's residents as "foreigners", foreigners in the sense of barbarians or outsiders, the way Mongols or Koreans or Chinese would have been perceived. The would have been recognized as part of the same civilized group, with similar cultural and religious customs.
Thus, it can be concluded that in pre-modern Japan, prior to the Meiji nationstate, the Japanese possessed a relatively high degree of ethnic and regional solidarity, even if they were understood to have been part of a greater "Japanese" identity.
Reference
Hudson, Mark. 1999. Ruins of identity: ethnogenesis in the Japanese Islands. Honolulu: University of Hawai'i Press.
Please pardon the meandering and unorganized composition, I am writing this at 4 in the morning with poor sleep the night before. I welcome and encourage further input and corrections.