Article 3 of the Anti-Prostitution Law of 1956 states that "No person may either do prostitution or become the customer of it", but no judicial penalty is defined for this act. Instead, the following are prohibited on pain of penalty: soliciting for purposes of prostitution, procuring a person for prostitution, coercing a person into prostitution, receiving compensation from the prostitution of others, inducing a person to be a prostitute by paying an "advance", concluding a contract for making a person a prostitute, furnishing a place for prostitution, engaging in the business of making a person a prostitute, and the furnishing of funds for prostitution.
The definition of prostitution is strictly limited to coitus. This means sale of numerous acts such as oral sex, anal sex, intercrural sex, and other non-coital sex acts are all legal. The Businesses Affecting Public Morals Regulation Law of 1948 (Fuzoku Eigyo Torishimari Ho), amended in 1985 and 1999, regulates these businesses.
The sex industry in Japan uses a variety of names. Soaplands are bath houses where customers are soaped up and serviced by staff. Fashion health shops and pink salons are notionally massage or esthetic treatment parlors, and image clubs are themed versions of the same (Cosplay). Call girls operate via delivery health services. Freelancers can get in contact with potential customers via deai sites (Internet Dating sites), and the actual act of prostitution is legally called enjo kôsai or "compensated dating" to avoid legal trouble. Kabukicho, an entertainment and red-light district in Shinjuku, Tokyo, measures only 0.34 km2, and has approximately 3,500 sex parlors, strip theaters, peep shows, "soaplands", 'lovers' banks, porno shops, sex telephone clubs, karaoke bars and clubs, etc.
According to National Police Agency records, out of 85 non-Japanese people arrested for prostitution offences in 2007, 37 (43.5%) were mainland Chinese and 13 (15.3%) were Thai, while Taiwanese and Koreans made up 12 (7.2%) each
In Tokyo, prostitution dates back several hundred years. In the early 17th century, first attempts were made to criminalize prostitution in Yoshiwara in Edo (present-day Tokyo). A law was passed which required prostitutes to register and work in secured facilities, its main purpose being for tax collection. Prostitutes were divided into classes or ranks, and the men of society would use the services of those afforded to their position in the city
In modern times, Tokyo's prostitution trade is well regarded for its high class of services and large customer base. Because of Tokyo's position as a top 5 global business and trade city, prostitution continues to thrive in Tokyo. Clients on business trips or trade conventions, along with traditional tourists, continue to provide demands for Tokyo's sex industry, providing economic benefits.