Earlier quoted context omitted.
I don't understand the question. Japan is intensely racist and xenophobic, probably significantly more so than the US.
Their point was that Japan is ethnically and culturally homogeneous enough that they don't feel the need to implement exclusionary zoning, regardless of how racist and xenophobic the general population is.
For an example of how this affects who can live where and how where one lives affects non-residential opportunities, you can read up on burakumin (a disfavored heredity pseudo caste). Burakumin status still exposes one to highly non-trivial societal discrimination, and is primarily observable based on “Have you or yours ever lived in a burakumin neighborhood?” This makes e.g. historical maps which mark out burakumin neighborhoods into socially contentious informational hazards; Google Maps had to take them down after a (utterly well founded) fear that at least some employers and schools would cross-reference neighborhoods with current or historical applicant residential addresses and then go full Harvard University on them.
Similar observations can be made about ethnic Koreans, Japan’s rapidly growing population of long-term resident foreigners, etc.