Martial art expert in town in Japan (5)
I believe the answer is:
ninja
'martial art expert' is the definition.
(I've seen this before)
'in town in japan' is the wordplay.
'in' says the answer is hidden in the clue.
'NINJA' can be found hidden inside 'town in japan'.
(Other definitions for ninja that I've seen before include "Stealthy warrior" , "Japanese martial arts mercenary" , "martial art expert" , "Japanese trained assassin" , "One who steals" .)