I doubt it has anything to do with racism or xenophobia and more to do with the sometimes backwards Japanese Banking System and interbank networking they have.
For example some regular Japanese bank card "Cash Card" won't work in America either or any other international destination either, unless the card is tied to PLUS, STAR or other interbank network. Some Japanese banks issue special "International Cards" for travelers going overseas.
Other banks like Shinsei Bank are on the PLUS network already. Heck my Japanese card won't work at some other Japanese networks either. For banks in Japan it's all about partnerships with other banks and systems, some cards don't work on systems where there are no partnerships. So it's more with the sometimes backwards system then anything else.
Any case it's not in my opinion and it's not something worth pursing if you are trying to tie them together/ can't use ATM so it must be racism!!!... Though some people do like to try to tie things where there's nothing to tie.
I knew someone in another forum who was trying to say that the way the Japan Rail Pass was set up, it was racism FOR foreigners because they can't use ALL trains... I digress..
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Any case, JP Post Offices take them, and every place has a post office (minus minor small towns or villages).
Not just Post Offices, but Japan Post Bank ATMs can be found at other locations outside of Post Offices.
http://www.jp-bank.japanpost.jp/en/i...ias_index.html (post offices found virtually all over Japan, JPBank marked ATMs outside of Post Offices work the same as well)
Citibank Japan accepts cards on the PLUS/Star networks and most international cards as well:
http://www.citibank.co.jp/en/banking...atm/index.html
7-11 accepts cards as well, however it must be in 10,000 increments of withdrawal. 7-11 never charged my Bank of America card, however BofA charged me off network usage.
http://www.sevenbank.co.jp/intlcard/index2.html (Plenty of stores in many major cities, there are more 7-11 stores in Japan then there are in the entire US!)
Shinsei Bank also works with some foreign cards, but not all. YMMV
http://www.shinseibank.com/english/atm/location.html