I've lived in Japan for several years and this isn't my experience at all. It is quite common to encounter Japanese people with strong perfume, cigarette odours, halitosis, or body odours. Public transport is quite crowded and you will come into close contact with many people. Everyone becomes accustomed to their own smells and may be unaware of the discomfort that it causes others. As in every country, some individuals are more considerate of those around them than others.
One thing to note is that using deodorant or antiperspirant products is not a common cultural practice in Japan. It's not something many people do on a daily basis and these products have limited selection and availability in Japan as a result. Fragrances and perfumes are seen as for special occasions but people do wear them in evenings and on weekends. It's a pernicious myth that Japanese people don't get sweat or have body odour, it's common especially in onsen and the hot, humid summers.