It’s not just the Japanese, but the Chinese and Koreans (up until the 1950s), and Vieatnamiese also have holes!
Japanese 5 Yen
Chinese Yuans
The reason why they have holes in an ancient one. It’s becasue Ancient Chinese,, Japanese, Korean, and Vietnamese business men, merchants, and normal people didn’t have wallets. Instead they carried all their coinage on strings!
While wallets are now used in place of strings, the tradition of putting holes though coins today is strictly for appearances. It gives the coin a distinct look that connects with a country.