Melt the unsalted butter in the microwave (about 15–20 seconds) or on the stove, then let it cool for a couple of minutes until liquid but not very hot so it doesn’t separate the mayonnaise.

In a medium mixing bowl, whisk together the mayonnaise, ketchup, rice vinegar, 1 tablespoon of water, and the melted, cooled butter until smooth and fully combined. The mixture should be a light pinkish-orange color.

Add the sugar, garlic powder, onion powder, smoked paprika, sweet paprika (if using), kosher salt, black pepper, and hot sauce (if using). Whisk well, scraping down the sides of the bowl so everything is evenly incorporated.

If the sauce is too thick, whisk in an additional 1/2–1 teaspoon of water at a time until it is creamy and slowly falls off a spoon—loose enough to drizzle but not runny.

Transfer the hibachi sauce to a jar or airtight container. Cover and refrigerate for at least 2 hours, preferably 4–6 hours or overnight, to let the flavors meld and develop that classic steakhouse taste.

Before serving, stir the sauce and taste. If it is too thick, add a splash of water. For more tang, add a few drops of rice vinegar. For more heat or garlic flavor, add a little more hot sauce or garlic powder. Serve as a dipping or drizzling sauce for steak, shrimp, chicken, veggies, or fried rice.