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I am not sure if this is a known issue or not, but I noticed that the SC commands inputselect and text (possibly others) don't seem to support UTF as the window caption, eg
$utf = "日本人"; text 3:=$utf; inputselect(7:=$utf);
The main XY window seems capable of displaying it properly, as do the shell dialogs via inputfile etc, so I don't think it is because of my OS CP.