The solution is simple. You have to rename the directory such that you remove the Japanese characters entirely. Replace the name of the game directory with anything else, such as "Yakuzaonline", no spaces just to be safe, all letters of the alphabet. And instead of installing to Program Files (x86) I just put it straight on the C: drive. My directory for the game looks like this:
And in ryuonline is ryuonline_launcher.exe . Do this during the installation process. Installing to this directory with no Japanese characters fixed the failed patch error, and the game started downloading for me immediately. You can probably install the game in Program Files and still have it work, as long as you rename the directory, but if not then install it to the root of your C drive. It is yet to be proven whether this fix will work long term, but let's assume that it will for now.