A large flotilla chased the unidentified boat
A coast guard spokeswoman said the vessel - in waters off southern Japan - had been hit after failing to heed warning shots and an order to stop.
The boat's country of origin was unknown, but the spokeswoman said it was marked with Chinese characters.
This was the first such incident since March 1999, when the Japanese coast guard was involved in a high-speed chase with what it described as North Korean spy vessels.
Unwelcome visitor
After spotting the vessel north-west of Amami Oshima island early on Saturday, a flotilla of 20 Japanese ships had given chase, said coast guard spokeswoman Miki Sakamoto.
She said seven warning shots had been fired from a machine gun before the boat was hit in the stern and stopped briefly. A fire which broke out on board was apparently extinguished.
An official said the vessel looked like a fishing boat and was fleeing in the direction of China.
Correspondents say Japan has become sensitive of intrusions into its exclusive economic zone since the incident in March 1999, when Japanese warplanes and destroyers opened fire for the first time since World War II on two suspected North Korean spy boats. North Korea denied any involvement.
Last year, Japan and China were involved in a row after a series of incidents in which alleged Chinese spy vessels entered Japan's economic zone without notice.
Since then, the Japanese coast guard has deployed high-speed boats carrying 20mm machine guns and sophisticated search-and-surveillance technology, including night vision.