Japan is very insular, especially around immigration policy, they don't like foreigners.

True, but also there simply aren't enough foreigners there yet for them to progress from the "damn foreigners grumble grumble" phase to the "We must deport those foreigners or they'll Westernize/Islamize our children and end the Japanese race!" phase. I mean it's gonna happen eventually, but we still have a bit of grumbling before they start calling it a crisis.