The 33-year-old fly-half, who retired from international rugby after the World Cup, had agreed a two-year deal to move to Scotland when the capital club were being run by Edinburgh Rugby Ltd.
However, the sudden end in August of a franchise agreement with the consortium led by Bob Carruthers, which saw the club returned into Scottish Rugby Union hands, resulted in Larkham's contract being scrapped.
That came as a blow to the player who had vowed to "change the landscape" of Scottish rugby, and he found little time during the World Cup to consider his future.
A minor knee injury was another complication, which Larkham believes ended his chances of a move to Newport Gwent Dragons, and now Japan beckons.
"The cut-off for the European tournament was the 18th of this month, so we really didn't have a lot of time when Edinburgh pulled out," Larkham told the Canberra Times.
"During the World Cup and all that, you'd think there would be plenty of time but with injury and everything there was no time to get around.
"We finally got around to see Toulouse at the end, but they basically wanted us to be back there in two weeks and that gave us no time to get stuff organised here.
"Everything was just so rushed because Edinburgh pulled out so late, so now we're looking at other options and Japan comes up in June next year, which certainly would be a bit easier for us at this stage."
Larkham has held talks with Top League teams and said: "I suppose the beauty of Japan is it's a little bit closer to home."