Hi,
According to your post, my understanding is that you have an issue about the display name for users created by Japanese.
What did you mean the Japanese external user stored correctly in AD?
Per my knowledge, the external users are not stored in your organisation, that means they are not stored in your AD.
If the users stored in the AD, per my test, the user name will display well no matter what language created.

You can check the user profile in the user profile service to make sure the user has been synced properly.
Central Administration->Application Management->Manage Service Applications->User Profile Service Application->Manage User Profile
To narrow down whether the issue is related to the user itself, you can create a new user in the AD, then check whether it works.
Thanks & Regards,
Jason
Jason Guo
TechNet Community Support
