A Japanese court on Monday ordered a group of anti-Korean activists to pay a Korean school in Kyoto 12 million yen ($120,000) in compensation for disturbing classes and scaring children by holding "hate speech" rallies outside the school.

The ruling acknowledged for the first time the explicit insults used in the rallies constituted racial discrimination, said human rights experts, lawmakers and others calling for restrictions on hate speech. They said the ruling could prompt a move to exempt such speech from Japan's constitutional right to free speech.

Though attendance at such rallies has been limited to a few hundred people at most and they are far from becoming mainstream, similar demonstrations of nationalists targeting ethnic Koreans and other minorities have escalated since earlier this year, amid Japan's chilly diplomatic relations with its Asian neighbors.

The rallies highlight why Japan's conformist society has been criticized at home and abroad for being less accepting of racial and ethnic diversity. Discrimination against ethnic Koreans and Chinese dates from Japan's expansionist era in the first half of the 20th century and still runs deep.

"Japanese society has been too insensitive to racial discrimination," said Yoshifu Arita, an opposition lawmaker who is starting a parliamentary panel with a dozen colleagues to introduce hate speech legislation. "We must take steps to eradicate hate speech against Korean and Chinese people, and address broader discrimination problems."

In the Kyoto District Court ruling, Presiding Judge Hitoshi Hashizume said the language that members of the anti-Korea group Zaitokukai and their supporters shouted and printed on banners during rallies in 2009 and 2010 was illegal, and had disturbed classes and scared the students. The judge said posting video footage of the rallies on the Web was illegal.