Seriously? There are Nazi cosplayers all over the place in Japan. And honestly the reason boils down to they have little or no clue as to what the Nazis really were as anything but a kind of nifty fashion statement. As Eurocentric as most of the posters here are, the Nazis really weren't that big a deal in Asia. From a cultural standpoint, both the Chinese and Japanese armies are responsible for more dead civilians in Asia than any number of Germans. They had their own war to fight and European WWII history is largely lost on them. It's really out of character for Japan to ban the swastika in a game.
To the people trying to villify Japan because of its war record: Everyone committed atrocities during that war. Americans tortured and killed prisoners, murdered civilians and mutilated bodies. Soviets raped countless civilians on the road to Berlin and murder was pretty common too. Commonwealth forces were notorious for executing prisoners rather than escorting them back to base. The Chinese fought amongst themselves, forced civilians into labour and killed prisoners as well. So yes while Japan did commit some of the most horrific war crimes of WWII its really narrow minded to think that only the axis was somehow 'evil' while everyone else was just and upstanding.
To the people trying to villify Japan because of its war record: Everyone committed atrocities during that war. Americans tortured and killed prisoners, murdered civilians and mutilated bodies. Soviets raped countless civilians on the road to Berlin and murder was pretty common too. Commonwealth forces were notorious for executing prisoners rather than escorting them back to base. The Chinese fought amongst themselves, forced civilians into labour and killed prisoners as well. So yes while Japan did commit some of the most horrific war crimes of WWII its really narrow minded to think that only the axis was somehow 'evil' while everyone else was just and upstanding.