The VRChat client does not accept IME input of Japanese characters unless the client/executable is started while the OS keyboard is set to Microsoft IME JP input. (The black circle with a J icon signifies IME is the active keyboard, while the A, あ, and nothing signify it's subsettings.)

If you start up VRChat with the default English keyboard activated as an English set up OS would, it will never adjust within VRC despite switching to IME in Windows taskbar, so attempting typing Japanese into VRC's chatbox will always input default latin characters, or likely the default of whatever a user has. What I believe is the issue is that the client takes whatever the current OS keyboard is and makes it "static" in some form and doesn't allow it to be changed. I don't know if this is EAC or something else that sees it as an issue since IME does create a small window of predictive text over text input boxes.

As virtually every other program can accommodate this sort of keyboard change, I don't believe this is intended behavior

Because most Japanese users do not have any reason to have English keyboards by default, and use romaji settings as a backup within IME as an inverse to how English language exchangees tend to, this issue is rarely encountered by them to be reported, and I notice some similar behavior tickets among English users who don't fully grasp what might be happening.

Windows has a tendency to default to English keyboard and not maintain settings per application, so if I don't keep track of this every time I open VRC, I will need to reset my client in order to type in Japanese. This is especially tricky if I am in VR as switching to Japanese IME on the fly requires a multiple-key bind.

Windows 10