There is no consensus among scholars regarding the definition of city pop.[2] In Japan, the term referred to music that projected an "urban" feel and whose target demographic was urbanites. Many city pop artists did not embrace Japanese influences,[2] and instead largely drew from American funk, soft rock and boogie.[9] Some songs feature tropical flourishes or elements taken from disco, jazz fusion, Okinawan, Latin and Caribbean music.
If a necessary condition for something to be called Counterculture is promotion of anti-Western aesthetics, then the main issue is whether or not its American influences count as anti-Western. Chronologically, the Counterculture era had already begun in America by then, so a strong case can be made that citypop artists perceived American influences as anti-Western. It should especially be noted that American aesthetics are associated with anti-conservatism in Japan:
https://aesthetics.fandom.com/wiki/YankiThe name "yankii" is borrowed from the English word "Yankee", a name taken from the American GIs who gave the Japanese their first glimpse into the world of rock ‘n’ roll.[1]
in contrast to conservative Japanese preferring European aesthetics. So from this angle citypop could be considered Counterculture. On the other hand, we cannot ignore the attempt to minimize Japanese influences in citypop (back to first link):
"City pop" referred to the likes of Sugar Babe [ja] and Eiichi Ohtaki, artists who scrubbed out the Japanese influences of their predecessors and introduced the sounds of jazz and R&B—genres said to have an "urban" feel—to their music. ... The term has drifted in and out of the musical lexicon ever since. ... With a term as vague and broad as city pop, it's natural that no one seems to be agreeing on what the label actually means anymore.[2]
which would appear to be a symptom of low self-esteem, whereas we typically associate Counterculture with the regaining of self-esteem by "non-whites". I think what was going on at the time was that citypop artists were dissatisfied with Western aesthetics but felt safer challenging it with American aesthetics. As they saw other artists successfully challenging Western aesthetics without relying on American aesthetics, the citypop artists rejoined the mainstream, thus citypop as a separate genre faded away.
Bonus MV: