The captain allegedly tried to flee, despite an order to stop, the coastguard added.
The Chinese captain and 11 other fishermen were about 42 kilometres off Miyako island, southern Okinawa, the coastguard said, well inside Japan's Exclusive Economic Zone.
Arrests like this are not uncommon and usually cause little extra friction between Beijing and Tokyo, who are at loggerheads over the sovereignty of a disputed chain of islands.
Japan says Chinese boats looking for coral or fish often venture into its EEZ. They are usually chased out by the coastguard, but occasionally arrests are made.