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If you are a US citizen and have a US Credit Card you will be able to buy books from the US store. Even if you are not, there are ways to buy books from the US store. Essentially you need to have a US address and a US credit card. I am guessing that you have both. The companies do not need to know that you have left the US and I don't think they check IP addresses. If you want to be safe, you can use a VPN blocker so that the companies cannot read your IP address.
You get to define what a budget e-reader is for you. If you want to spend up to $150 on an e-reader then go for it. Don't let someone elses definition of what a budget e-reader is influence your decision. People have different priorities and different income levels and that sets their budget not some random number in the sane. Personally, I think the $114 Kindle is a budget e-reader. It has all the benefits of the Kindle and you have to deal with some ads and offers on the screen savers. It is less expensive then the WiFi model and the 3G/WiFi model. That would meet my standard of budget. If your standard is anything under $150 then great. It just so happens that that number gives you a wide variety of options.
I would never consider reading on a smart phone. The screen is far to small. There are a decent number of folks on this board who have moved from a smart phone to a 5 or 6 inch ereader for exactly that reason. Smart phones strike me as a nice stop gap if you don't have yor ereader with you and you want to read but I would never consider a smart phone as my full time reader.
For $150 or less you are looking at being able to purcahse a Sony 350, a Kindle WiFi, a Kindle Special Offer, a Nook Classic, a Kobo, and a bunch of other ereaders that I don't know a thing about including their names.
The Nook Classic is probably out for you because it is sold only in the US. You will have to set up an account with a US address and credit card initially to buy books. You can use gift cards but I think a credit card has to be associated with the account at all times. You will have to use a VPN blocker if you are outside of the US because BN has fully locked down their store. You can make it work but you might have more problems with exchanges nad customer service living overseas with the Nook then you would with the others.
The Sony 350 would be a good fit. It reads EPub and so is open to a multitude of bookstores which makes shopping easier for you overseas. It has a 5 inch touch screen, good battery life, and is loved by just about everyone who uses it. It is an international device which should make support a bit easier although there are mixed reports about Sony's Customer Service. It can read library books right now. It does not have WiFi or 3G. I think you can get it for $129 right now.
The Kindle is another option. I know you said it was out because you want to read library books on your e-reader. Since that feature is coming, I am going to discuss the Kindle. Two models fall into your price range, the WiFi and Special Offers version. They both have 6 inch screens. They both have WiFi which gives you a bit more freedom to buy books when you are not near a computer and some folks have reported that the text base web browser works well in a pinch for checking email and news sites. The Amazon bookstore is massive and easy to use. There are other bookstores that you can buy Mobi books from and send to your Kindle using email or the USB cord.
I do not know if the Kindle is going to have library access in Japan. If you have library access in the US then you will be fine.
It sounds to me like the Sony 350 would best fit your needs. You don't seem to be thrilled with internet access on your phone so I am guessing that internet access on your ereader is not a plus. It reads EPub so is guarenteed to be able to read library books in Japan. It is an international device so you will be able to get support across the globe pretty easily.
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