The most common and most likely answer to this crossword clue is the 7 letter word OKINAWA
I've seen this crossword clue in The Sunday Telegraph
O
K
I
N
A
W
A
More clues leading to the result OKINAWA
- Love family vacationing perhaps in Scotland or Japanese city
- Old family, one at war endlessly somewhere in Japan
- Bangkok: in a way, largely Asian city
- All family members at home in Scots island?
- It’s all right, getting somehow reduced
- Pacific island oxygen needed before one gets into handjob in reverse
- Japanese island acceptable to a certain extent, docked
- Old family abroad, wasting year in Japanese island
- Part of Beaverbrook in a war’s campaign
- Good at home but away mostly on island
Buddy explains!

The straight part
We know that "Japanese island" is the straight/definition part of the clue. The straight part is often a synonym or definition, in this case japanese island = okinawa.The cryptic/wordplay part
In cryptic crossword there's often an wordplay/cryptic part as well.This part involves a more complex hint, such as an anagram, homophone, hidden word, etc.
Sadly, We don't have an explanation for this specific crossword clue yet.