I would like to summarize the situation regarding discrimination in Japan in this thread. Please feel free to add your views.
Japan is a country where few people believe strongly in religious, political or philosophical ideas. In other words, morals and ideals are not a major concern, because people rely a lot on common sense and values inculcated by the educational system or the society. Japan is a very collectivist country when it comes to rules. People usually don't do things that are frown upon, but also tend to do things that might be considered immoral in other countries, just because "everybody" (=many people) else does it (eg. political corruption, teenage prostitution...).
Racial discrimination
Usually not a big problem at work, because Japanese are usually in contact with foreigners while working for foreign companies (so they are subordinates and can't complain). However, few foreigners happen to work for Japanese companies. That may justly be because of discrimination from the recruitment process ("foreigners don't speak Japanese well enough or do not understand the Japanese system").
I am not quite sure of the discrimination encountered by Koreans or Chinese born and raised in Japan. There is dicrimination against them, but they usually tend to change their name to a Japanese one, so that it becomes almost impossible to tell they are foreigners.
The most common complaints regarding discrimination in Japan is for accommodation. Nowadays, few hotels will refuse foreigners outright because they don't look Japanese (even if they speak Japanese, like Alan Booth explained in his book the Roads to Sata). But cases of real estate agencies or landlords refusing to rent an apartment/flat to someone only on grounds that they are not Japanese, even if they are fluent in Japanese, have a stable job and a long-term or permanent visa, are still common place nationwide. It is not even illegal (or not enforced) for them to post signs such as "no foreigners or dogs allowed". The government visibly has a lot to do to curb discrimination.
Interestingly, there is no word in Japanese for "racism". The nearest translation is 人種差別政策 (racial discrimination policy) or 人種的偏見 (racial prejudice). But these words do not include the sense of superiority felt by real racists (like the Nazi). It is also undeniable that a lot of Japanese feel superior to their Asian neighbours, while discriminating against them. It is thus convenient for Japanese not to have the word "racism" in their vocabulary, so that no law can effectively prohibit it, and discussion about it is seriously hampered.
Sex discrimination
Contrarily to the common belief, discrimination toward women is not so deply anchored into Japanese history and traditions. For instance, Japan has had several empress already before the Heian Period, and as late as the Edo Period. Women were officially banned from reigning in the early 20th century, during a surge of national mysoginy.
After WWII, women have had specially assigned, such jobs as receptionist, secretary, dead-end OL positions or just serving tea, smiling and cheering the male staff. This is not unique to Japan, but Western women reach more equalty earlier than in Japan (although feminist movements have existed at least since Meiji in Japan).
Sex discrimination, combined with sexual harassment, have been part of everyday life in Japanese companies. A lot has been achieved regarding sexual harassment, but glass ceilings preventing women from reachig high positions still exist in most Japanese companies.
Interestingly again, Japanese have no word for "glass ceiling", which makes it more difficult to tackle as many people do not even think about the concept.
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