The 25-year-old's place in the travelling party goes to former Munster utility back Jeremy Staunton, who scored 186 points in 20 appearances for NEC Harlequins this past season, before being released from his contract.
Wallace, who is likely to be out for four weeks, sustained the injury in Friday's trial match at Wanderers FC, Dublin.
The Ballymena clubman kicked two conversions before being replaced on the 40-minute mark.
2003 World Cup squad member Wallace made a telling contribution to the Ireland 'A' side in their only fixture this season. He kicked four penalties to help the Irish to a 15-9 victory over France 'A', before coming off with a calf strain at Donnybrook in March.
Staunton, meanwhile, has a chance to earn his second Ireland cap on the Far East trip - the Limerick man scored a try from full-back on his international debut, in the 35-8 Lansdowne Road defeat of Samoa in November 2001.
The revised Ireland squad, which is coached by Niall O'Donovan, will train tomorrow morning at the University of Limerick.
IRELAND SQUAD (Japan Tour 2005):
Simon Best (Belfast Harlequins/Ulster) 11/02/78, 6 capsReggie Corrigan (Greystones/Leinster) 19/11/70, 44 capsLeo Cullen (Leicester Tigers) 09/01/78, 15 capsSimon Easterby (Llanelli) 21/07/75, 42 capsTrevor Hogan (Shannon/Munster) 23/09/79, -Marcus Horan (Shannon/Munster) 07/09/77, 28 capsBernard Jackman (Clontarf/Leinster) 05/05/76, -Denis Leamy (Cork Constitution/Munster) 27/11/81, 2 capsEric Miller (Terenure College/Leinster) 23/9/75, 46 capsMatt McCullough (Ballymena/Ulster) 09/09/81, -Johnny O'Connor (Wasps) 09/06/82, 6 capsFrankie Sheahan (Cork Constitution/Munster) 27/08/76, 22 capsDavid Wallace (Garryowen/Munster) 08/07/76, 21 capsRoger Wilson (Belfast Harlequins/Ulster) 21/09/81, -
Tommy Bowe (Belfast Harlequins/Ulster) 22/02/84, 1 capKieran Campbell (Dungannon/Ulster) 06/07/79, -Girvan Dempsey (Terenure College/Leinster) 02/10/75, 58 capsGavin Duffy (NEC Harlequins) 18/09/81, 2 capsAnthony Horgan (Cork Constitution/Munster) 15/11/76, 4 capsDavid Humphreys (Capt) (Dungannon/Ulster) 10/09/71, 67 capsKieran Lewis (St Mary's College/Leinster) 19/08/80, -Conor McPhillips (St Mary's College/Connacht) 09/02/81, -Kevin Maggs (Belfast Harlequins/Ulster) 03/06/74, 69 capsDavid Quinlan (Northampton Saints) 04/01/78, -Jeremy Staunton (Wasps) 07/05/80, 1 capPeter Stringer (Shannon/Munster) 13/12/77, 56
Gary Brown (Blackrock College/Leinster) 01/11/80, -James Downey (Clontarf/Connacht) 23/03/81, -Ben Gissing (Clontarf/Leinster) 15/07/75, -Shane Jennings (Leicester Tigers) 08/07/81, -Chris Keane (Buccaneers/Connacht) 25/10/78, -Ronnie McCormack (Buccaneers/Leinster) 27/04/77, -Paul Shields (Ballymena/Ulster) 25/09/78, 2 capsAlan Quinlan (Shannon/Munster) 13/07/74, 21 caps
Not considered due to injury:John Kelly (Cork Constitution/Munster) 18/04/74, 16 caps