I try to book only those rooms that have cancellation options clearly described.
Usually a 100% refund if cancelled 5 days out.
Advance booking feels chancy but if you want to stay in a nice place in a nice area you almost have to book far in advance
Another factor to consider is what card you use and the foreign transaction fee charged by that card. Some are better than others, call the company and ask what the fees are and write it on the back of the card to remember which is which.
I recently booked $1000. for two stays in Kyushu this May through Japanican and my cc company charged roughly $25 each for the dollar/yen conversion toward the ryokan/hotel.
Some other contributors may know the best strategy for minimizing these fees.

Hyatt advance purchase rates are often the best rates but as you note, you can neither change nor cancel. For other hotels that are Japanese the best rates are usually found online on their Japanese language website and do not require payment in advance. Booking sites in English, in my experience, are more expensive and have unforgiving change and cancellation policies.

Insurance may cover - or not. Read the fine print carefully of the policy to be sure. Many, for example, were not covered for cancellation in 2011 because natural disaster was excluded.

It would have to be a BIG discount for me to do it 10+ months in advance.

A few years ago, I took that same advice from KimJapan and was able to book the Rihga Royal in Hiroshima. Got a great rate via their Japanese page that wasn't available on the English page.

You could do some insurance shopping online to see what the coverage is.

We book villas every year in Mexico with two other families. Full payment is usually due 2-3 months prior. We have not had to use our travel insurance (knock wood), but both other families have been able to get illness-related full refunds with relatively little bureaucracy. Not sure if the "cancel anytime" or "cancel for work reasons" work as well.

With hotels I would never pay 10 months in advance, unless as mrwunrfl says, it was absolutely the deal of the century. I like to remain flexible because better deals or cooler options often show up at the last minute. But I have paid in full 1-2 months in advance, which is usually when I book big trips anyway.

I don't normally have that problem as I tend to plan trips about one month in advance. On my last trip to Japan, we started planning about 2 weeks beforehand. Heck, I only had one reservation set when we arrived! The rest were arranged at the traveler info centers across from the train stations, and our first night we got at the info counter at Narita Airport. I had lists of places that looked good. They called for me and got even better than the Internet rates. If you stick to Japanese lodging, they usually have you pay as you check out.

I know you like to plan far in advance, though, so it might be different. Travel insurance will cover you if you get sick, have a death or illness in your family, have a work related issue or "for any reason" if you buy that kind of policy. I've had very good luck with claims through Chartis' Travel Guard's gold policy, which has the "any reason" optional rider.

I very rarely book non-refundable rates, and I carry travel insurance even less often. On my last trip I booked one hotel (in Buenos Aires) on a non-refundable rate because I thought the saving was too good to pass up, but I was prepared to eat the cost if necessary.

In Japan I mostly stayed in places like the Toyoko Inns, or small independent places, which allowed cancellation. Hyatts are above my pay grade...

I like non-refundable rates but have found that I can wait until the last minute (say a month before) to book them. My strategy is to book a refundable rate to "hold" the reservation and to book the non-refundable rate later. Also, we booked the Hyatt in Kyoto with Kim at a rate that was very competitive and included breakfast and other amenities. We will not be invoiced until just before we arrive. You might want to take a look at that.

Kim, I'm all ears!

We have a rate there but I wouldn't call it competitive.

Kim found that for our dates we could get a better rate on the Hyatt site. So it depends on exactly when you are traveling. The rate on the Hyatt site needed no pre-payment and is cancelable up to 24 hours in advance without penalty (we had to give a credit card guarantee).

Anyone who is planning on/thinking of staying at any of the Hyatts and has not ever had the Hyatt Visa card, please listen up: this card offers 2 nights free at a Hyatt hotel after you've spent $1000 on the card. However, if you just Google the card, the free night offer is for category 1-4 Hyatt, but all of the Japan Hyatts are category 5 & 6. To get the offer that includes category 5 & 6, you have to use a few more keystrokes, and I'd rather no go into those details here. You can get those details on Flyertalk, or send me a note - don at dontopaz dot com.

A few more details about the card: When you get the card, you also get immediate Platinum status at Hyatt. (If you're already Platinum, you get bumped to Diamond, I believe.) The card costs $95/year, but you get a $100 statement credit, so that's a wash. Besides, the value of 2 nights at, say, the Park Hyatt in Tokyo is around $7-800, anyway. Award nights at Hyatt are usually easy to score, except for a few properties like the Park Hyatt Paris. If you ever had the card before with the 2 free nights, you cannot get the 2 free nights a 2nd time round.

Credit where it's due: Bob Kimball first brought this card to the board's attention about 3 years ago.

FW - you can email me. Like kathie said though I was unable to get better rates for her peak season stay at the Hyatt. But we can book anything almost always without prepayment or even deposit.

Don, I am emailing you.
Shelley

Kim, I don't think I have your email addy

K dot keefe at theartoftravel dot net.

Emailing you now

I booked some of my October 2012 trip using Agoda, a discount site. As above, I only booked where I had free cancellation option on the room and indeed an itinerary change meant I cancelled a booking (and it was refunded to my card without problem) and made a new booking.

Downside is that you pay upfront, rather than on checking out.

Upside is that the site seems to be much clearer on the room types (and the actual differences) than many of the hotels' own sites are.

Dormy Inn is already a budget chain, but the discounted rate meant we were able to book a large Japanese Western combination room which gave us a lot more floor space. Still the normal tiny bathroom but that was acceptable to us.

We also used Agoda for Hotel Granvia in Kyoto and Hotel Century Southern Tower in Shinjuku, Tokyo (which was just a few days ahead of departure, as we had to swap some of our itinerary around after late discovery of a national holiday).

For the rest, we used Japanese Guest Houses and direct bookings.

I do remember being advised (possibly here on Fodors or on another travel chat site) that some hotels give a discount for JR Pass holders, but the Agoda price I booked was less anyway.