For children with an American parent born in a foreign country you can easily register up untill (I believe) the childs 18th birthday. After that the child needs to provide proof that he has an American parent or something along those lines. Either way, the "deadline" isn't any time soon.
The only problems that arise from a later registration would be:
1. If you were to take the child to America, without registration of citizenship and an American passport, you'd need a visa for the child/etc. and apparently you can get into catch 22 situations for the registration afterward (I don't know the details, that's just what I read).
2. Without a SSN I don't think you can register your child on your taxes as a dependent, or there are apparently some problems there. I'm not sure on the details of that one either, again something I just read somewhere.
Either way I think registering within the first year and before you make any trips would lead to the least headaches. We registered at 4 months. The only thing that didn't go so smooth for us was we didn't have good pictures for the passport (white background! correct size!) and we don't live close to an embassy, only a consolate. To register at a consulate you need to get an appointment in advance, and they only had about one or two days a month. Anyway, since you already went through the process with your older child I'll bet you're just about as knowledgeable as me anyway. If you really want to investigate further you can check out http://japan.usembassy.gov/e/acs/tacs-7115.html for some pretty detailed info, or just calling a consulate or embassy directly will get you any info you need without a wait.