This ban was originally intend to target prostitution, but dancing is hardly required for prostitution. As a result of this ban, underground dance clubs formed. The citizens still found ways to get around the ban, so it was rather pointless. Lifting the ban means tourists and citizens can now enjoy a busier nightlife without fear of legal repercussions.
Decades ago, Japan was a struggling nation of poverty and crime. The law banning dancing after midnight was a misguided attempt to discourage people from hanging out in bars that were known for prostitution. Economic growth and the prosperity of citizens did more to encourage responsible behavior than the dancing ban every did.
The ban was introduced back in 1948 and was linked to anti-prostitution laws. It was reinforced in recent years following a series of scandals related to night clubs and night life in general, culminating in the death of a young person outside a club in Osaka. The authorities were concerned about the bad behavior of young people and the subsequent crackdown included reinforcing the ban in dancing after midnight. This seems an unnecessary and ineffective action.
There was no reason that dancing after midnight should have been banned in the first place! It's just another example of a governmental body trying to legislate morality though lawmaking. I'm glad that after all this time the people are finally wising up and taking control of the situation. Dance on, Japan!