Karuizawa is one hour from Tokyo by Shinkansen, so many of the skiiers, shoppers and hikers who visit are tempted to make a one-day trip. That's unfortunate, because Karuizawa provides excellent opportunities to enjoy the quiet, cool woods, and excellent dining - especially the European kind. Hotel rates are cheap compared to Tokyo, so I'd recommend an overnight in Karuizawa.
The Silver Fox pension (B&B) is a good choice. It's a clean, comfy B&B with a comfortable lounge, kept warm by a wood stove. They have a big ceramic Japanese-style bath to help you keep warm.
The high point was the cooking. The owner specializes in a beef wellington with Japanese beef, which is a big hit with the guests. He confesses he doesn't know much about wines, but the ones he has on hand are good and not overpriced.
Dinner and a large breakfast are included in the 9,000 yen per person.
Rooms and beds are snug, and typical of a Japanese B&B you might find the temperature either... more