I'm not gonna give you a straight answer, but I'll try to think of a few reasons.
One reason I can think of is ventilation. At least in my area, most houses (especially older ones) are "on stilts", in a sense. I know some people put agricultural tools and stuff under there when they're not using them. I wonder if people don't store other things as well. I imagine that this has to do with letting humidity settle as far as ventilation goes. Here we have lots of rice fields too... so if they were to ever flood as a result of a TON of rain (which I can't really see happening with the kind of irrigation they have) then it would be a good idea to have their houses slightly elevated like they do.
Incidentally, the "stilted" foundations or "slab" style foundations that I've also seen have come into handy for a lot of people and the surrounding cities recently. When the city wants to widen their roads, they pay people to "move" their houses like 20 feet. This process involves building a new foundation and picking up the house and moving it to the new foundation (this is a simplified version of what actually happens I'm sure, but as a passerby of these houses that's all I see of the process). I think it's interesting to note that a lot of rivers have been "hand-crafted" in a sense. In otherwords, rivers have been redirected by people and I wonder if they didn't move houses similarly to how they move them now as a result of that as well.
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*After doing a quick search on the net*
I should preface this by saying that I have noticed many floors of 'basement' in big city buildings (especially in Tokyo), so I don't see why that couldn't be done for houses as well.
I kinda did a couple of quick searches like on wikipedia/wikipedia jp etc. I used the word 地下室 and didn't get much info from there. On google I did see a couple of house building companies who say they can build a basement on request. I think the land has to meet certain requirements though. It seems that it is just cheaper to build a house above ground, basically. Another thing, within the text that I saw, they seemed to mention the "plots" of land a lot... I wonder if there is a special tax for plots that go under ground?
As I am basically writing this off the top of my head, I'll paste what I found just now which might be the answer to your question:
"平成６年、建築基準法が改正され、天井高が地盤面か の高さ１メートル以下にある地下室の場合、延べ床面 の１/３までが容積率に算入されなくなりました。つまり、同 じ敷地でも、２階建てに地下室をプラスすれば、床面積 が１.５倍の住宅を建築できるというわけです。このこ で住宅の可能性は大いに広がりました。
建ぺい率・容積率の厳しい地域や敷地内に傾斜地がある 所でも敷地の有効利用が出来ます。
５人家族が充分快適に過ごせる１・２階の間取りに加え 、１フロアを地下室でそっくりゆとりのスペースとして お使いいただけます。
使い方はご家族の希望にあわせていろいろ！音楽を楽し んだり、収納に使ったり、書斎、アトリエとしてお使い いただくのはいかがでしょう。
住むだけから楽しむスペースがある暮らしを提供します 。 "
Looks like there was a regulation that existed up until about 15 or so years ago. So maybe you won't see basements except in newer houses- and even still, they may not be popular yet. I'll try to understand that chunk of Japanese a little more later on.
Here's the website that it came from:
狭い土地に広い家！？-ミツヤジーホーム（地下室付きデザイン注文住宅-長野県長野市）