I've sort of assumed that it's a combination of a lack of "prudishness" with regards to matters of sexuality and the body compared to the West and not considering animation and comics to be a medium just for children (TV Tropes' "animation age ghetto").

But I might be wrong of course.

They have entire sub-genres that are dedicated to various ages. Some are little kids, others are teenagers and then adults. The adult stuff can range from fetish crap to deeper stories like with Berserk or Elfen Lied. It has a market for kids but there is also a huge market for adults.

I for one hope this doesn't pass because it sets a precedent over there which would suck. One thing i have always admired in the Japanese in not creating a double standard with either violence or sex (usually a country bans one on TV but allows the other..).

Little too late to hope that. It's now law. This *is* going into effect officially in July 2011. But in reality it'll go into effect on January 1st. Everybody will continue to complain loudly about it, but it's not going to make it go away.

It is now illegal to sell a manga representation of the Tale of Genji* to children. Yet they can purchase and read any novelization of it -- indeed, some schools may require it be read. The manga versions make it easier to understand the plot.

* A fairly important Japanese work (often proclaimed as the world's first ever novel) which features a number of sexual encounters of questionable legality.