Indeed it is the application through Monbukagakushou Scholarship (MEXT Scholarship).
However, please notice that, the name of the scholarship is MEXT Research Student Scholarship.
So what you are going to do is once getting the admission as a research student is:
1.
1-2 years Research Student/ Intensive Japanese Language Course (at certain language school or respective university)
Should you have a good command of Japanese, then you are exempted from the intensive Japanese Language Course. Your university, which is taking you as the Research Student will decide on that, based on your Japanese Language test taken in the scholarship selection process.
In this duration, you will also have to study for the entrance examination, usually for the entry of April, should you would like to be a masters or doctorate student in the university. The entrance examination could be at October-February.
If you are getting the admission as postgraduate student, then your research student status will be terminated, and at the same time, you will have to apply for the scholarship to be postgraduate. (That is what the extension is all about)
If you fail, then you are allowed to take the entrance examination at another time (at your own cost, I guess? Together with other applicants, of course), for another entry, until your duration of research student being offered is over.
2.
2 years Masters
Should you advance to doctorate course, you will have to extend your scholarhip application again.
3.
3 years (or above) Doctorate
Hope that clears the cloud a bit. Please correct me if I have mentioned something wrong. Thank you! Good luck everyone!!!