Need to remember this =p.

Well for one thing from what I hear the Letter X is an offensive symbol to Japanese people and #2 the library is still not vast enough for japanese tastes (despite a much better effort this time around) and Japanese just not much into american systems.

they dont like American made consols.

Let's get one thing straigh. This is not the reason.

Japan has always been leading in A. Technology and B. Innovation.

What does the 360 have with those?

 Here we go again =p.

Because they like the PS3 and Wii way more.

Japan supports japanese based companies and nintendo, and sony are obviously based out of japan. At least the 360 is improving from last gen.

^Defiantly an improvement.
http://vgchartz.com/hwlaunch.php?cons1=XB&reg1=Japan&cons2=XB&reg2=Japan&cons3=X360&reg3=Japan&weeks=156

Not even a funny troll.

I can give you loads of reasons and i'm in the mood.
Let's start off with style:
Japan likes artistic games. They prefer the anime style. It shouldn't rely on realistic graphics alone it should have a good design. For some reason they also don't like shooters that much(see next section for a hypothese on that).

Culture:
Artistic mentioned above and a collectionism culture. Honor is important and playing a shooter where you single handly save the whole world is considered egocentric (which well frankly... it is). Most live in a tiny house/appartment with there whole family. They play games for fun and mostly aren't so hardcore as the western more individual culture who sit in there rooms all day.
The Xbox360 also makes alot of noise which isn't prefered in the living room.

Stereotype:
It's an american system competing with systems from there own contry. Is relativly new and doesn't have a powerful nostalgia effect yet. Maybe because of the import it costs more there then in the Uk/America (would have to look this up).

Reliabity:
Japan likes quality. Hearing that 16 percent of 360 consoles experience some type of failure within six to 10 months after the warranty purchase isn't likely going to convince them (http://www.electronichouse.com/article/xbox_winning_in_failure_rate/C157).

Genetics:
Japanese people aren't the biggest people around. They tend to have small hands and the xbox controller is known to be pretty bulky.

There is literally a light and dark difference between japan and the america's.

Note: I generalised Japan a bit, yes I know that there are alot of exceptions and stuff.