I don't deal with it all that much these days, as Japan is still a pretty homogenous country, but it struck me recently.
Fundamentally, racism is to treat someone differently because of their ethnicity (or perceived ethnicity). I think it's very interesting how people justify their racism.
In my opinion, it is acceptable to hate individuals for their actions (and corporations - although their actions tend to be the result of individuals in control), but to say that you hate a nameless population because they are a specific ethnicity seems to be clear racism.
Nationality versus ethnicity is an interesting issue. For certain countries, they are almost one and the same (to an extent), although I don't think any country can claim complete homogenity of ethnicity and nationality. So, is hatred of a nation racism? It seems pretty close, but really hard to tell.
I find this interesting because Japan is a pretty homogenous nation, but there are quite a few different ethnicities here. There are the native populations, of which the Ainu are probably the most well-known. There is Okinawa, which historically was an independent nation that frequently traded with China. There are the generations of Korean descendents who have been born and bred in Japan and have recently become full-fledged Japanese citizens (I believe). There are also at least one generation of Chinese descendents who live here. So we talk about the population of Japan, it is not as homogenous as people may think.
Racism is an issue where my parents truly do not seem to understand my thinking. I think the difference must be in education. Do they talk about racism in Taiwan? I don't think they talk about it much in Japan or China. But it's a huge issue in the U.S.; I surmise because of the civil rights movement. It's very interesting how education affects consciousness.
A local sushi restaurant has a sign advertising for employees which says "no foreigners." The whole concept of racism seems to be alien. I think the U.S. concept of equal opportunity is rather alien. Of course, it took the U.S. a while to develop this concept from U.S. and European theories of justice and rights. Women's suffrage took a while! And African American suffrage took even longer. Rather different from what I know of Confucianism. Confucious had some good ideas, but he had some really stupid ones too.