The Japanese government decided it was okay because fish is such a huge export of Japan it would be detrimental to their economy if they were not allowed to fish whales. It could offend people globally, but Japan is such a powerful nation that sanctions from a body such as the UN or WTO would generally be ineffective.
Hunting whales is a large part of the Japanese history and tradition, according to this website. The article also goes on to state that it is this history and pride that leads the Japanese culture to want to hold onto the tradition of hunting and eating whales. It is believed that attack on their actions may lead to a belief that it is an attack on their culture.
According to Time, whaling also continues because of a loophole found in the International Whaling Commission (IWC). By claiming that the hunts are done in order to produce scientific research and data, the whales can continue to be killed and eventually packaged for consumption.
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