This article reviews the current state of Japanese legal system regarding Content Moderation including automated or AI-based system operated by Hosting Service Providers (HSPs) and its relationship with knowledge-based limitation of liability of and injunctions against HSPs. We have been careful enough not to legislatively impose HSPs general monitoring obligations due to concerns on de facto censorship, significant chilling effect on freedom of expression and cost burden on HSPs. However, recent discussion was leaning towards proactive monitoring of illegal information with expectation that introduction of Content Moderation equipped with AI will become easier due to the progress of technology diffusion and cost reduction. This Japanese legal status and discussions are evaluated in comparison with global legal system especially recent EU legal system updates and judicial precedents. Finally, it concludes with extraction of issues such as prohibition of general monitoring and imposing excessive cost burdens on HSPs and need for confirming effect of proactive Content Moderation on knowledge-based limitation of liability.