The series is set during the 1830s/40s and there is no outside trade since Commodore Perry hasn't shown up yet.

There was trade with the Dutch at Nagasaki as well as trade with Korea, the Ainu, and most importantly, with Chinese merchants.

But they wouldn't need to have trade for it for long because tobacco grew very well in Japan. It was introduced in the late 16th century by the Portuguese and it was wildly popular within a generation. I've found a lot of debate in the English literature over when exactly tobacco was first introduced and/or cultivated in Japan, but in 1877 English diplomat and botanical hobbyist, Ernest Satow, gathered up a number of early Nagasaki references to tobacco that give a nice general impression of its introduction. A Nagasaki physician named Saka wrote in 1607:

"Of late a thing called tobacco has been in fashion. It is said to come from Nanban. Broad leaves are cut up and lighted, and the smoke is swallowed." Under January-February 1609 there is a further entry. "For the last two or three years an article called tobacco has come from Nanban, and all classes of Japanese amuse themselves with it. It is said to be a remedy for all diseases. But on the other hand, however, cases have occured of persons falling ill who had inhaled it, and as no medical work contains any directions for the treatment of such patients, no medicine could be be administered to them."

p. 69, The Introduction of Tobacco into Japan by Ernest M. Satow in Transactions of the Asiatic Society of Japan v. 47, 1887.

Nanban, literally southern barbarians, was a common word for the Portuguese. More information about the term in this previous Ask Historians post. The Japanese word tabako is derived from the Portuguese tabaco.

This entry highlights the ironic history of tobacco as an alleged cure, while showing this physician's skepticism that it might be making people sick.

In 1615, English trader Richard Cocks wrote in his diary, "It is strange to see how these Japons, men, women, and children, are besotted in drinking that herb ; and not ten yeares since it was in use first." (With tobacco still a new thing, "drinking" was the best verb he could muster for what we'd call "smoking".) But with this new addiction, there cane opposition to tobacco. In the same entry of August 7, 1615, Cocks writes:

Gonosco Dono came to the English hows, and amongst other talk tould me that the King had sent hym word to burne all the tobaco, and to suffer non to be drunk in his government, it being the Emperours pleasure it should be so ; and the like order geven thorowghout all Japon. And that he, for to begyn, had burned 4 piculls or C. wight this day, and cost him 20 taies pico ; and had geven orders to all others to doe the like, and to pluck up all which was planted.

p. 35, Diary of Richard Cocks, cape-merchant in the English factory in Japan, 1615-1622 : with correspondence.

In fact, in the early 1600s, there was a flurry of anti-tobacco legislation. There are a number of bans and regulations put out by the early shogunate, the most wide-ranging one being a 1612 proclamation which completely banned smoking, trading, and cultivation of tobacco. The government had many reasons to be leery of tobacco: Smoking introduced another fire hazard into Japan's paper and wood cities. The easy cash crop of tobacco could replace cultivation of essential food crops. Tobacco was an addictive luxury on which smokers wasted money with no return for their families and society in general. And the tobacco smoking was associated with the extravagant counter-culture of the day, the Kabukimono.

This total ban on tobacco was reaffirmed in 1615, and it's in response to this ban that the Portuguese trader Dono is burning his trade stock in the above passage. Yet the fact that he and Cocks were still trading tobacco three years after it was absolutely banned in 1612, is a good indication of how ineffective these early bans were. Tobacco was too ingrained in Japanese culture now to be wiped out. By the second half of the 16th century, tobacco was grudgingly accepted as an ordinary part of life. Authorities did, however, limit the amount of land used for tobacco crops. Large cash crops of tobacco were particularly common in the Osaka area, since Osaka was a commercial shipping hub of Japan.

Throughout the Edo Period, many government officials and non-official scholars and moralists continued to exhort the public to cut down on tobacco. One famous shogunate 1649 document dictates the proper frugal behaviour of peasants in every area of life, and includes the line

“they should not smoke tobacco. It is harmful to health, it takes up time, and costs money. It also creates a risk of fire."

• quoted p. 115 in The Making of Modern Japan by Marius Jansen

Jansen observes of these orders that they're best read as "the products of samurai officials who had a very low estimate of farmer diligence and intelligence, and at some variance with the life the farmers actually lived." (p. 115, Ibid). Farmers knew how to manage their own lives, and government lectures on how they should live were routinely ignored. Crop reports for villages across Japan often show they raised small crops of tobacco for local use, even if they didn't grow enough to sell outside of their region.

Tobacco was also often a target of sumptuary laws. I've written a bit on sumptuary laws before, so I'll quote my answer from this post: What are the real reasons kite-flying was banned in 18th century Japan?

You see, the shogunate and the domains pretty much banned everything from time to time. Fireworks, silk clothes, colourful clothes, travel, dancing, music, the lottery, religious feasts, kabuki theatre, prostitutes outside the official quarters, the list goes on.

Sumptuary laws are laws that control how the population spends its money by trying to restrain "frivolous" expenditures and activities. They attempt to legislate frugality and "virtue" among the people, and in Tokugawa Japan, were often part of larger political and economic reform programs to reduce corruption, waste, and improve the economy, while giving aid to the needy. If people weren't wasting their money on frivolous extravagant things, and their time on useless pastimes, everyone would be better off. If every person acted according to their status in life - peasant, samurai, merchant - and didn't try to rise above that status, the world would be orderly and all would prosper. Or at least that's the Confucian ideal.

Just going by the number of Edicts issued against *everything, you'd think Tokugawa Japan was a totalitarian state. The most strictly legislated class was the samurai, who were often forbidden to take part in all sorts of things that were not "appropriate" to their status: such as watching kabuki theatre. Then there were also laws to keep peasants and townsfolk from dressing above their station. But in reality, the rules were pretty bendable and inconsistent. Events like a recession could trigger big reforms with a flurry of new edicts, but these were the exception, and sumptuary laws would fade away until the next reform movement.

Tobacco was always one of these frivolous vices, eyed with contempt by moralists, but completely unstoppable.

A courtesan languidly smoking a pipe in the pleasure quarters was rather elegant, but those chimney-smoking ruffians in Zatoichi are sending a different message with their incessant smoking. For that, we can turn to the autobiography of Katsu Kokichi, low-life ill-educated gangster and delinquent Tokugawa retainer, who had the audacity to write a memoir of his life for his better behaved and successful children and grandchildren. The following passage in which Kokichi is trying to impress his acquaintance Tora with his power in the underworld is exactly contemporary to the Zatoichi series.

"Tora, do you smoke?"
"A little, but I've given it up now that I'm in training."
"Hah—that's what I call being fainthearted. Whoever said you can't smoke just because you're in training? Listen, I came to visit you today because I'd heard that you were a really tough guy, but if you're going to be like that, you'll never be able to make your way in this city."
"Well, if you say so, I'll smoke. Just today."
I called down for someone to buy a pipe and tobacco.

p. 115, Musui's Story: The Autobiography of a Tokugawa Samurai by Katsu Kokichi, translated by Teruko Craig.

For Katsu Kokichi and other would-be toughs, smoking a pipe was an advertisement of your power and viriity.