A coastguard plane spotted the No. 8 Kaisei-maru emitting orange flames and thick black smoke some 400 kilometres south of Kochi prefecture, national broadcaster NHK said.
The fate of the two Japanese and five Indonesians on board remained unknown. It was also unclear what caused the blaze.
The coastguard received a report from a local fisheries radio station shortly after 6:00 am that it could not contact the 19-ton vessel.
More than four hours later, its plane found the burning ship, NHK said, showing footage of the vessel with its bridge in flames.