The Japanese translation of "Lord of the Rings" by Teiji Seta and Akiko 
Tanaka may be regarded as one of the greatest translations in Japan.
Mr. Teiji Seta (1916-1979) was an expert of classical Japanese literature
and a Haiku poet; these facts explain why his use of Japanese is so 
beautiful. Seta also translated "The Hobbit" and C.S.Lewis's "Narnia" 
chronicles. These translations are also great.

Many Japanese readers of "Yubiwa Monogatari" (Japanese title of LotR)
love the translation so much that they (including me) often get mad at
unfounded criticism against Seta's works. Some youngsters who don't 
read much books complain that Seta's translation is oldish and not so 
readable; but I think it is owing to their lack of reading experiences. 
The oldish style is intentional, and I have learned much oldish and 
beautiful Japanese from Seta's translations.

The translation is almost perfect. At very rare intervals, errors are 
found and reported on the net. In fact, I was glad and proud when I 
found an error, because this proves that I read the text, both original 
and translation, extremely closely. Nonetheless, there is one major 
"error" concerning the fidelity of translation: sometimes the translation
gets too rich even when the original is terse. Here follows some examples:

(1): (original) "Indeed things have changed!"
     (Japanese) "Souden henji te soukai to naru ja."
       (Blue sea changes into a mulberry field, a phrase used to
          describe how things have changed completely.) 

(2): The translation of Ori's diary is ten times more dreadful than
     the original.

I love these "errors".

As for the translation of names and proper nouns, there are
inevitable linguistic problems: all the names which is written in English
in the original, such as Underhill, Proudoot, Crickhollow, and Staddle are 
translated into Japanese (kanji) names, while other names, such as
Baggins, Butterbur, Brandywine, and Bree (note the respective order)
are not translated and treated as loan words (katakana). 
Although this is the correct translation according to Tolkien's 
direction, Japanese readers may feel somewhat odd
about the mixture of kanji and katakana names; kanji names sound rustic
and katakana names sound very foreign. For example, Frodo uses a kanji 
pseudonym "Yamanoshita" (translation of "Underhill") to conceal his real 
name "Baginzu" which is in katakana.
In western languages such as French and German, the atmosphere of 
translated and untranslated names may not differ so much and they can 
coexist without much conflict, but in Japanese this is a very controversial 

Old English and Celtic:
Tolkien "translated" some names into old English and Celtic, such as 
Smeagol, Mathom, and names in Rohan and Bree. Some place-names of Rohan,
such as Mark, Dunharrow and Hornburg, are translated into Japanese,
and all the rest are untranslated.

Concerning the translation of "Bree": 
This is a subtle issue. "Bree" is a Celtic word for "hill", but also
means soup and gruel in Scottish. In the first edition of 
"Yubiwa Monogatari", Bree was translated as "Kayu Mura" (Gruel village),
and later it was revised to katakana name "Burii Mura".
There are quite a few die-hard first-editioners who refuse the 
revision and stick to "Kayu Mura".

Concerning the translation of "Strider":
Seta translated "Strider" as "Haseo", which is composed of two kanjis
"Haseru" (run, reach far) and "Otoko" (man). Some readers insist that
it sounds too Japanese for a character in a Western story, especially
when they read the English original first. Alternatively, it might be
treated as a loan word and written in katakana (Sutoraidaa); but it
in turn sounds too sophisticated and the contemptuous nuance is ripped
off. This is a very controversial issue intermittently discussed among
the Japanese fans, as intensely as the Balrog wings.

Some puns are wondoerfully translated. For example:
original: "Proudfoots" "Proudfeet!"
Japanese: "Ashidaka-ke" "Ageashi-ke da!"
(Ashidaka approximately means "high feet". "Ageasi" means
"to lift feet", and also means "nitpicking")

In Japanese poetries, rhymes are not used. Instead,
haiku-like 5-7-5 letters punctuation is prefered.
Accordingly, the translations of the verses in the book 
don't rhyme and haiku-like punctuation is used.

In LotR, some of capitalized words have important meanings. For example,
Gollum refers Sauron as capitalized "He", and Shelob as "She".
Gollum swears that "never to let Him have it". I think
this oath does not forbid Gollum to let Shelob have Frodo
and the Ring, because She is not Him. In adittion, Gollum
takes the Ring from Frodo when he put it on at the Cracks of Doom.
I think Frodo became "Him" at that moment, and Gollum took the
Ring to fulfill the oath.
Unfortnately, there are no capital letters in Japanese. "He" is
translated as "aitsu", which is a neutral, third-person pronoun
with somewhat hateful nuance. "She" is translated as
"Obaba", which approximately means "hag" (not a pronoun).

Definite articles:
Place names in "The Shire", such as "The Hill" and "The Water"
implies that hobbits live in a small and closed community.
Unfortnately again, there are no articles in Japanese.
"The Shire" is translated as "Hobbit-Shou". "Shou" is an obsolete
word like "Shire". "The Hill" is translated as "Oyama", which is
composed of two components
"O (a prefix used to make a word courteous)"+"Yama (hill)".
"The Water" is simply translated as "Kawa (river)".