From Wikipedia:
Due to the current interpretation of Article 175 of the Criminal Code of Japan, which forbids distributing "indecent" materials, it is believed that most pornography in Japan must be at least partially censored. The primary means is to put a digital "mozaiku" (mosaic) over genitalia. There have, however, been very few arrests for violations of this law.
The most recent trial based on this law, the first in 20 years, was the conviction of Suwa Yuuji in January 2004 for his hentai manga Misshitsu. He was originally fined 500,000 yen(About 4,900USD) and avoided jail time by pleading guilty. When he appealed the case to the Supreme Court of Japan on arguments that the manga was not as indecent and explicit as much material on the Internet and that Article 175 violated the Japanese Constitution's protection of freedom of expression, the Court upheld the ruling and the fine was tripled to 1.5 million yen.
After Yuuji's conviction, a number of bookstores and chains removed their adults-only section. Their motivation has been attributed to the outcome, in a "chilling effect".
On the July 2013, the three staff members from the Core Magazine were arrested for having their manga almost censored. He pleaded guilty later in December 2013. As a result of the arrest, numerous artists and publishers began to have more self-censorship in attempt to avoid the obsenity charge led by police.