Shang Erqiang, a 40-year-old Tokyo restaurant operator originally from China, was arrested last week, a police official told AFP.
Reports dubbed the animal as an "80 percent real giant panda" because its head and ears appeared to belong to another animal -- possibly another type of bear.
Television pictures showed the animal being displayed in a bamboo-decorated glass cage.
Japanese law protects the trade in endangered animals and carries the threat of fines and imprisonment.
Pandas are revered in China, and Beijing often uses the bears as diplomatic gifts to other countries.
Just 1,600 remain in the wild in China, with some 300 others in captivity.