I know this thread has been quiet for a little while ;-), but I just wanted to say that at least in my version (gold edition with u-boat missions, running both TMO and RSRD), you can indeed sink Japanese subs.
I was in late '42, off the southern coast of Japan, on my way to Korea, when I saw a Japanese sub:
It blew up real good, it turned out only 1 torp was needed, though I sent 3:
here it is on its way to the bottom, the hole my torp blew in it is by the cursor: