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Depends on the non-japanese side. Japan does not have any rule about that, and the case you’re describing is actually quite common for some European half kids having two different passports with different family names, but Iirc it’s more complicated with Australia for instance.
Was the baby born in Japan?
If they’re a Japanese citizen, they’ll have their Japanese parent’s surname as far as Japan is concerned. If not then they’ll have whatever name is on their passport.
Whether Malaysia will allow you to register them with a different name from what their Japanese documentation says is a question for Malaysian law; some countries allow it, some don’t. Bear in mind that even if it’s legal, it can cause them problems in later life when their name doesn’t match.
You’d have to check with Malaysian authorities.
Also, it’s not recommended, even for those with countries which recognize dual/multiple nationality (such as exchanging driving licenses, and obtaining degree in one legal name but needing to utilize it in another legal name, to more extreme, getting caught in a country they are not a citizen of with multiple legal names, which could be seen as having multiple Identities etc)
The additional thing to worry about is that Malaysia does not recognize dual/multiple nationalities past age 21.
So when your adult kid leave Japan to travel to Malaysia, they would have to book their flight ticket under the Japanese name. But then enter Malaysia on their Malaysian passport. But hot damn…. Guess what, the Malaysian passport name wont match the flight ticket name. (Duals with countries that allow dual nationality, this is not so much of an issue. But risky for countries that don’t allow it)
That’s two completely different names, different IDs not matching can be an administrative nightmare. I think if it was similar or only omit/add an extra name like a middle name that would make it easier for your child later in life especially if they want to go abroad for work/education and there are inconsistencies with their documents.