Yutaka Kitamura (LL.M. candidate, Michigan) has published The Application of the Japan-U.S. Tax Treaty to Trusts, 41 Tax Notes Int’l 577 (Feb. 13, 2006), also available on the Tax Analysts web site as Doc 2005-24946, 2006 WTD 31-12.  Here is the Introduction:

Trusts are becoming one of the hottest legal issues in Japan. The Trust Business Law of Japan (Shintaku gyo ho), which regulates trust business in general, was completely replaced with a new Trust Business Law in 2005. The new Trust Business Law expands the types of assets eligible to be held in trust and eases requirements for becoming a certain type of trustee. Also, the Trust Law of Japan (Shintaku ho), which provides general laws in connection with trusts, is scheduled to be completely replaced with a new Trust Law in 2006 to provide a more modern and sophisticated trust system to facilitate the wider use of trusts.

Thus, the use of trusts in Japanese domestic transactions is expected to significantly increase. Simultaneously, the use of trusts in international transactions between Japan and the United States may significantly expand if the avoidance of international double taxation on income related to trusts is to be assured. In other words, the tax treaty between Japan and the United States may play a significant role in allowing the expansion of international trust transactions between Japan and the United States.