The idea that Japan was conservative in pornography is not true. The government might be conservative, but certainly not society as a whole. Japan had a thriving pornographic industry during the Edo period, where erotic woodblock paintings known as shunga (春画) were extremely popular. These depicted everything from regular sex to bestiality to tentacle sex to bondage murder?. Furthermore, erotic novels from China (such as Jin Ping Mei) were also quite popular.
In the 1930s, there was also a movement called the ero guro nansensu, or ero guro for short, which stood for "erotic grotesque nonsense," which was influenced by European styles. Many manga and novels were published using this style. Here are some examples (some of these are more modern):
But one thing you'll notice from the Edo era woodblock paintings is that they depict genitalia, whereas the ero guro art works from the later periods does not. To be fair, the Tokugawa did attempt to regulate the spread of pornography, but I wouldn't characterize it as overly successful. After the Meiji Restoration, the government began to implement stricter censorship laws. According to Article 175 of the Criminal Code, which first appeared in 1907, punished people who sold or distributed obscene materials, and the depiction of genitalia and public hair was considered obscene (I have seen people say this is because the Japanese wanted to conform to Western moral values at the time, though I'm not sure how accurate this argument is). This law survived into today, but as censorship was banned under the new post-war Constitution, officials instead pressed the various media industries to begin self-regulation (much like Hollywood in the US). This is why pornography produced for domestic Japanese audiences today place mosaic over the genitals, whereas Japanese pornography produced for international audiences are uncensored.
