During the Edo Period (1603-1868), the fish market serving the area now known as Tokyo was located in the waterside Tsukuda neighborhood. There, small, bruised fish and other seafood and vegetables with little or no commercial value were simmered in a mixture of soy sauce and mirin to delay spoilage. Huge vats of seasoned soy sauce became deeply flavored with each addition of salvaged seafood. When necessary, the mixture was thinned with water.
In the households of those who worked at the market, various kitchen scraps were repurposed by soy-stewing them into gohan no tomo (literally translated as “rice friends”; relishes to be served with rice). Reclaimed items prepared by soy-stewing came to be known as tsukudani, or “simmered in the manner of Tsukuda.” Tasty and inexpensive, tsukudani became a staple among the common people.
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Source: The Japan Times