Nudity in Japan.

I am watching this TV show (while I write this) that is this big end of the year festival show, which has an enormous number of the year's famous acts, songs, comedians and such. According to my host mother, 50 percent of the people watching TV at this time are watching that show!
Well, in this one song (which I rather like, google or youtube DJ OZMA) as they sing (I wont talk about what they sing, as it is pretty self explanatory) they are all taking off their clothes. In the music video and the several times that I have seen the song performed on TV, they stop at underwear. However, today was a little different, In the last stanza, all of the performers, men and women were topless, just wearing small underwear, and in the end, when they usually drop their pants down to their underwear, they dropped everything, except because Japan has really weird censorship laws, you can't show pubic hair (or something like that, I won't saw all I know!) and so they all had 'happy new year' esque, handkerchef like things taped? glued? something to their bodies.

I wonder how the censorship laws work at the naked festivals?