it is possible i've got it the other way round, but i will have to look it up.
anyways, it matters what address you put in while linking the paypal account and not where the bank/cc company is located. if you link an address that is outside of Japan, the rules will change accordingly (unless this has been changed, too).
edit: ok, my memory is like a Swiss cheese, yet your google skills are crippled, as it took me 5s to find.
BigDaikon.com • View topic - New Paypal restrictions for Japanese residents
the source:
http://www.sidley.com/files/News/cd6...03.30.10v2.pdf
So it would seem that you cannot send money, as Sangetsu says. And it was 2010 after all. Now, I will try to find something on receiving money, but i reckon, if your PayPal is linked to a foreign address, rules of the country that address is in will define what you can or cannot do with PayPal.