Upvote:3
If your phone is locked, it won't recognize Japanese SIM. You must unlock your phone, make it a SIM FREE phone. After that, you are free to use any services you want.
Regarding @jcaron comment, Apple Pay can be used in Japan just like in US. You need to change the region of your phone from US to Japan for it to recognize Japanese credit/debit/prepaid cards.
Please note that only iPhone 7 purchased inside Japan (model J/A) can be used as commuter card (Suica). https://support.apple.com/en-us/HT207154 (from @Zack Lipton's comment)