Up to now Japanese nanotechnology research efforts have focused more or less upon the creation of mesoscopic devices and quantum effect devices.
Quantum effect devices involve quantum wells, quantum wires, quantum dots, and Coulomb blockade devices. These are all structures which take advantage of quantum effects engendered due to the small scale of the device rather than any intrinsic effects of the substance out of which it is constructed. Interest has been addressed towards the development of new materials with desirable characteristics, the possibility of high-speed switching in these devices, a lowering of the energy per bit of information stored, compression of circuits and storage of data, low noise, and the material behavior being determined by geometry rather than intrinsic behavior.
The wide applicability of such devices in the electronics industry for future electronics is why nanotechnology research has, up to now, focused more or less on this top-down, inorganic side of nanotechnology. At present, however, public sector nanotechnology projects seem to have started to shift towards the biotechnology side. This may be due to the fact that the government feels the private sector (in this case the electronics companies) has picked up the research ball in the area of quantum devices; enough research seeds have been sown, and it is time for government to shift over to pushing biotechnology projects.
Final Hurdles.
The roadblocks which exist in the path of nanotechnology development in Japan are far more due to the structures of how technology is developed, rather than any actual technical barriers. Japanese research laboratories are still very vertically structured (the kenkyuusitu), which leads to isolation and lack of contact between groups even in the same building. Also, thus far Japan has shown little mixing between fields. This may be changing, with the emergence of laboratories like RIKEN and NAIR, but for the most part researchers working in semiconductor processing (for instance) have been working completely independently of researchers working in chemistry.