There are some people in Japan who don't touch alcohol because of health, religion, alcoholism or simply being unable to process alcohol. (So, I guess the reasons boil down to health or religion). They come under pressure in work/business situations more than when among friends. In a business situation, you're often expected to forgo your personal preference - take one for the team, so to speak. Even in those situations, though, I think there's less pressure to drink than there used to be.

If I were you, I'd tell your host in advance - "By the way, I don't drink any alcohol. At meal times I usually drink sparkling water." Even so, your host will probably feel like he has to offer you some booze - failure to do so would be inhospitable. So be ready to say "Thanks. But I don't drink any alcohol." I think few people would ask why, but I know some people do. I have heard people say "My doctor told me that I had to quit completely" or "It just makes me feel very ill".

The trouble with asking for soda water is that you may find that they just don't have any in the house. It's readily available in supermarkets, but plenty of people simply don't have it at home. Same goes for Japanese restaurants. Your non-alcoholic options in some places will be tap water or tea (sometimes green tea, but often iced barley tea or oolong tea). Sometimes you just have to roll with it - I remember being with one colleague who caused a great fuss at a restaurant that served barley tea with lunch and he wanted green tea ("because this is Japan"). He was terribly surprised when the restaurant didn't go the extra mile for him ("I thought service was supposed to be great in Japan"). Come to think of it, he was a total a$$hat.

If you're staying a few days and you're getting tired of plain water or tea, you could say to your host "Do you mind if I buy some sparkling water? I think I'd like to have some with dinner". Your host will probably buy some.