A Japanese karaoke hostess bar in central Auckland is in hot water for having a sign which says "no Japanese customers allowed".

Shin Ito, manager of the Vansan II, says the sign was put up "for fun" by a previous owner of the business, but the Human Rights Commission says it could be in breach of the Human Rights Act.

A would-be Japanese customer, who was told the sign was a "parody" to the "no gaijin allowed" or "no foreigners allowed" signs found in Japan, said she felt "disgusted and insulted".

The sign on the door that left a Japanese would-be customer feeling "disgusted and insulted". Photo / Dean Purcell

The sign, on the main entrance of the Pitt Street bar, also says it welcomed those "who like sparrows more than cats and dogs", "believe aliens are real", "lost weight from the cause of diarrhoea" and "still wet their pants even as an adult" among others.

However, the last line said "no Japanese customers allowed".

A 29-year-old Japanese woman, who is in New Zealand on a holiday working visa, said she felt offended when she saw the sign and asked a staff about it.

The woman, who did not want to be named, said a staffer told her that it was a response to the "no-foreigners mentality" in Japan.

In Japan some establishments have signs that explicitly say they were for Japanese customers only and did not welcome foreigners.

"The staff said it was just a parody and that as a Japanese, I should understand because some places in Japan also didn't allow foreigners," she said.

"But I don't understand. Two wrongs don't make a right, and I feel disgusted and offended."

Ito said the sign was put up by a previous owner "just for fun" when the business ran as a "horror themed hospital cosplay bar".

Staff explained to the customer that the sign was a "parody" of the "no gaijin allowed" or "no foreigners allowed" signs found in Japan. Photo / Dean Purcell

"The sign means nothing now...and our customers are mostly male Japanese," he said.

Ito said the new owners had taken over the business last October, which was today being run as a Japanese-style hostess bar.

The business operates from 9.30pm to 3.30am, and is by booking only on Sunday nights.

Female staff, who wore themed costumes or kimono, would entertain customers by singing karaoke and cater to those seeking drinks and conversation.

Ito said not removing the sign was an oversight and told the Herald it would be removed.

A spokeswoman for the Human Rights Commission said under the Human Rights Act, it illegal for any business or organisation which supplied goods, services and facilities to discriminate based on ethnicity.

"It is unlawful...to discriminate against a person based on their ethnicity by refusing, or failing on demand, to serve them or by treating them less favourably than others," she said.

"We encourage businesses to be welcoming and inclusive when offering and providing goods and services to the public."

The commission spokeswoman said people who experienced discrimination could lodge a complaint with it.

"Our role is to assess a complaint and progress it to a satisfactory resolution," she said.