Trust me guys!, the Japanese government does NOT allow genitalia to be shown...Read this, got it from Wikpedia.
Censorship Laws
The religious and social taboo against nudity has historically been weaker in Japan than in the West: "pillow books" detailing sexual acts were widely sold in the Edo era, and women and men routinely worked in the nude and bathed in public up to, and even after, the Meiji Restoration. While in Western society nudity has typically been a taboo, that idea entered Japan only after Meiji-era and how deep that idea is rooted is argued. Extreme public nudity, such as showing the genital area, would nevertheless be prosecuted in Japan (except in gender-divided public baths, and even then discretion is required). The Japanese attitude toward nudity in the media is more liberal than that of the United States, although it is still conservative in contrast to western Europe. Oddly enough, Japan does not have nudist beaches although this may simply be due to land congestion problems.
In Japan, it is illegal for any commercial work to display the human vulva and phallus in an explicit manner. This law dates back to the Meiji period and has never been amended. Any publications depicting the penis or vulva must be shrink-wrapped and barred from sale to minors. However, it is not uncommon for pictorial magazines to depict nude women with their genitalia airbrushed over in black, and video pornography routinely depicts explicit sex scenes with the participants' genitalia obscured by mosaics. Until 1991, the entire pubic region, including hair, was deemed obscene and unpublishable. Recently there has been a diversification in the censoring market with there now being several companies which offer it. The government's sexual watchdog group is still considered to be the more harsh though this in many cases depends upon personal taste as most of the companies practices vary, with some opting for the more controversial (as opposed to the mosaic) big black bar. As of now it looks as if the censorship laws will be lessened due to the Internet's pervasiveness and the underground pornography movement which began in the late 1980's. However, it still has a large number of followers in the society as a whole and regardless of opinion it has become somewhat of a "cultural practice". An example would be that even though pubic hair is no longer illegal to depict, many adult movies still frequently censor it and hentai art and films do not usually even have it drawn. This has led some, predominantly westerners, to view Japanese pornography as being somewhat pedophiliac and seeing many of the females as being younger than they really are intended to be.
It is also illegal to bring pornographic material into Japan, and customs agents are known for checking videotapes in international mail and hand baggage. Extreme cases, like multiple offenders or attempts at commercial importation, could be punished by fines but most merely had their contraband confiscated. Applications of this law did not change in recent years, but more offenders are caught in recent years as checks became tighter to prevent the drug trade and terrorism.
There is also a thriving genre of underground pornography in Japan (called urabon) that ignores these censorship laws: it has become especially prevalent on the Internet, as there are no mechanisms in place to prevent its transmission from Japanese nationals to the outside world. Japan recently has begun a crackdown on child pornography especially photographs and videos involving an act of sex between a minor and an adult, largely due to U.S. pressure in attempts to gain a control over Internet trafficking.