*Short answer: *
Yes it is absolutely an algo stablecoin and if Japan were to ban them, it would be illegal there.

Long answer:
That said it is an algo stablecoin with a truly decenterlized base. This translates to they may be able to ban and prevent witness nodes from operating in Japan. However the rest of the 100+ nodes would just keep going and your money would continue to be safe and usable through a different access site. Furthermore the Japanesse government ( or any government ) wouldn't even be able to levy fines on the Hive blockchain owners since there is no one owner. There is no venture capital, foundation, founder shares/pre-mine, and no majority coin holders. It has the smallest attack surfaces of an blockchain I have looked at.