I'm a little late to the game, but I have an American iPhone SE and a Japanese Watch S2. You can issue a new nameless card to the watch and charge it up, but it failed at least once after "processing payment" to add the card. Luckily it was the minimum 1000 yen so if I lose it, that's the cost of trying this out. Presumably, the issues are with Apple Pay as it is laughably unstable, so we'll see how this goes.

I will say that the Watch pairing itself didn't go as expected either (had to pair first with a Japanese 6S, then unpair, then manually re-pair with my SE).

EDIT: For non-automated payments (non-transit), you can double tap at home screen to initiate payment, and swipe to choose the card, so this seems to work fine.

The payment on the watch looks like a total PITA because you need to get to the Wallet -- so if there are any machines where you're looking to do a quick tap, it may not work as well. I hope a software update comes out that has an option to leave one card in always activate state, as going through the UI is painful (first you should make the Wallet your first item in the dock by deleting everything else -- then when paying you still to click the big button once to go to the dock, tap to select a card, and then double click to initiate payment). Not exactly seamless.

Oh, and you can't use your phone to initiate a payment via the watch. Another thing really badly overlooked.