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Japanese Buddhism was somewhat corrupt and deeply unpopular with many ordinary people who considered it exploitative and parasitic. As well as being of foreign origin, it was also associated with
It wasn't till the Nineteen Twenties and Thirties that an ultra-Nationalistic Buddhism could boast of strong intellectual leadership. Thus the initial phase of modernization was in a context where religious voices were marginalized.
A rigid Caste system including an 'Untouchable' caste. However, it was clear that the rigid division between the Samurai/bakufu military government and the peasants led to low agricultural productivity. The 'peasant sage' Ninomiya showed how productivity could be increased by encouraging peasant rationality and cooperation. It is notable that Ninomiya Sontoku was able to persuade the local Buddhist priest to take up fishing to provide cheap protein to the people. The other class which had been greatly alienated was the merchant class (considered even lower than farmers) which had woken up to the fact that 'Western learning', especially in things like Medicine, was greatly superior to the traditional product.
Buddhism was associated with certain superstitious practices as well as wealthy people squandering their capital on religion in the hope of getting reborn as a divine being. The wealth it had accumulated over centuries made it a target for hatred and violence.
Japan was only able to get on to the gold standard thanks to reparations received from China after a successful war. This naturally reinforced the rejection of Buddhism as a non-violent religion which kept a Nation poor and dispirited. India and China were on their knees, while Japan had commenced its rise to equality with the West.