Many small streets in Japan mix pedestrians, bicycles and motor vehicles [1]. They may have a white line to indicate the difference between pavement(sidewalk) and road but it's really just a suggestion in practice. Cars on these roads tend to be more cautious and aware of all over road users. Pedestrians are also more aware of there surroundings because there is no illusion of safety that curbs can sometimes give.
The picture you linked is by no means a "small street" by Japanese standards. Small streets in Japan don't have a line in the middle, and most of them aren't large enough to have two cars crossing each other without effort.
[1] http://nomano.shiwaza.com/tnoma/blog/archives/20060601/m/dsc...