I only skimmed this topic, but there seems to be some misconceptions about the “Sort Name” in the database. This is a useless column that ought to be treated as deprecated, and it’s actually already been dropped from some top-level MusicBrainz objects (like the MB Label).
What editors should actually be caring about is the locale-primary alias’s sort name. This is where locale sorting should be defined. Here’s an example of where you’d define the Japanese sort name (as well as the English name and English sort name): http://musicbrainz.org/artist/b539e453-c4fe-47e3-8a07-8517eac74429/aliases
(Your version of Picard may be broken, but that’s a different discussion)