I'm a little out of date on my info, but I suspect it's still right. For Cambridge, Japanese would be perfectly acceptable as a MFL GCSE, and maybe even be a talking point (I'd hesitate to say it would be an advantage, as that would mean people at other schools which didn't offer exciting language options were at a disadvantage IYSWIM).
However, she wouldn't be able to take it as her language option (what's called "Paper 7") in her English degree.
Here are the language options for the Cambridge English degree:
"Finally, there is a language element: you choose either a paper on literature in a European language, or one on early medieval British language and its literature, or one on the English language. The papers on European or early medieval British literature require you to comment on, or translate short sections of, literary works in a language of your choice (from Greek, classical Latin, French, German, Italian, Old English, early Middle English, medieval Latin and Anglo-Norman ? several of which can be studied from scratch), and then to write essays in English on literary works from those languages. The paper in English language introduces you to the syntax, vocabulary and literary uses of English from 1300 to the present." Note that the choice of languages is now severely restricted!
The English language paper used to have a reputation for being harder than the MFL papers, but that may not be the case any more.
Cambridge does have a situation where you can 'borrow' papers from other faculties (i.e. study a course from another faculty instead of your own registered course), so in theory she might be able to 'borrow' a Japanese paper from the Faculty of Asian and Middle Eastern Studies. I had a quick nose around the site and couldn't see whether this would actually be feasible. There are plenty of language courses to keep skills up, though.