I just bumped into this problem as well. I reason seems to be that a valid title and a url_title has to be valid for the entry to be saved in the database.
With Japanese (or any multibyte/non-English alphabet) text, although the title could be saved in the database, the url_title cannot, as it needs alphanumerical characters, which the entry title doesn’t have.
I have an extension that uses the foreign_character_conversion_array hook to solve this problem in the entry form in the control panel (adds alphabetical syllables for Japanese kana in the url_title while the user types Japanese in the title field). The hook doesn’t seem to work in the moblog module, though.
What the moblogging module needs to work for any language is either the foreign_character_conversion_array hook to work, or have an override or preset for the url_title. Can that be done?
By the way, the “Automatically Convert High ASCII Text to Entities” setting was removed in EE2. It wasn’t very useful anymore as data is saved in Unicode in the database now.