It's still part of the main Twitter service, but the UI will be in Japanese. One interesting thing that we've done is that we're launching Japan with advertisements. For instance, one of our first advertisers is Toyota which has a Twitter account where they talk about events and products. The ad directs people to their Twitter account where the users can follow that account. Toyota can easily see who their fans are and follow what their fans are saying about them.
Twitter has always been big in Japan. I think it was nearly 30% of Twitter earlier on and has gone to about 13% as the US user base has grown. However, according to Twitterlocal, Tokyo is still the biggest Twitter city.
It's interesting that Twitter is so popular in Japan. It didn't even work properly in Japanese when it launched. (You had to put a Latin space at the end of any Japanese post to make the Japanese appear properly.) Also, Japanese mobile phones don't SMS properly with Twitter as far as I know. Still, it got crazy early adoption in Japan from the beginning. One of my theories is that a lot of services in Japan to be either closed or over-featured portals and simple services with good open APIs are not as common as in the US and it attracts developers and users who are sort of sick of a lot of the bloaty Japanese services.
Hopefully, with this Japanese language version launch, we'll see even more adoption in Japan. Congratulations to the teams at Twitter and DG who worked on this. Good stuff.
UPDATE 2: Post on Twitter Blog.