That is why an ancient emperor made Osaka the capital city . Osaka is a city in the Kansai region of Japan 's main island of HonshÅ `` , a designated city under the Local Autonomy Law , the capital city of Osaka Prefecture and also the biggest part of Keihanshin Area , which is represented by three major cities of Japan , Kyoto , Osaka and Kobe . Located at the mouth of the Yodo River on Osaka Bay , Osaka is the third largest city by population after Tokyo and Yokohama .