I think the way to deal with Japan's technology-much shorter order than dealing with China's-is to put it in whatever is Orthodox now at game start, to prevent it from falling too far behind, switch it to whatever is Latin now by Idea/Event/Decision in the 1550s, and switch it back by Idea/Event/Decision in the 1630s. Humans should have a very rough path (a la the Beys for the OE in EU II, except effective) to keeping either or both, but the AI should always follow the historical path.
At least in multiplayer. I doubt it'll be hard to dominate a game as even an ahistorically backward Japan in singleplayer.
And yes, I heartily agree. Japan should be a lot of fun and perhaps an occasional twist spoiler in MP.