I have some Japanese blog posts from before when I was running an early version of WordPress, and I can even enter some Japanese via phpMyAdmin and it shows as in:
http://edmiidz.com/nik/?p=115

But even if I try to type: “I was born in Montreal”, and give the e an acute accent, WP refuses to even save it in the database. I get Montr trying to save it in the Visual Editor

I wonder what happens if I write it in HTML…

Montréal (Montréal) That works!!!…
Still doesn’t help type Japanese though…. or even write accented letters without looking up their HTML encoding….

I also tried installing a few other instances of WordPress too. At first I assumed that something happened during an upgrade, and need to add something like http://www.webhost4life.com/hostingKB/KnowledgebaseArticle50270.aspx. But the new instance didn’t work. Then I tried downloading and installing the Japanese version too (as a new instance), but that didn’t work either…. All the menus showed up fine in Japanese, but any posting with non-ASCII characters would just show up blank…