Yes, you have to actually be using a font that supports Japanese in order to be able to view the characters. Thus if you speak several exotic laguages, you need a font with a pretty wide range of characters, like BitStream Cyberbit.
Unfortunately, the nick issue is a bit difficult. Since mIRC isn't supposed to be decoding server messages like NICK as Unicode on servers that doesn't explicitly request it, the problem you mention i a bit of a surprise. Perhaps when turning off the multibyte editbox you also somehow turned off Unicode support?
