Japan is a wonderful country known for many things, but sophisticated handling of racial identity and difference is not one of them. I've noticed less use of "gaijin," or outsider, over the years, as more people ask if I'm America-jin But the most common term for biracial is still one a young Cher would be familiar with: "hafu."
The non-Japanese Ryan Surdick writes about "hafu" in the Japan Times, and how it impacts his 1yo half-Japanese son:
The real problem I have is not with the word itself, but rather what it signifies about the user's thinking. It's often one of the first things people say when they meet my son. "Half" immediately becomes the defining characteristic of him to anyone he meets in Japan. And along with this comes a whole host of assumptions.Yes, now it's all assumptions and kawaii; the bullying and ostracization doesn't start until kindergarten.
There is more to my son than the fact he's a 'half' [japantimes via @abesauer]