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An advisory panel released a draft proposal on rules for a new system to incorporate phonetic characters to assist in reading kanji names in family registers. Under this proposal, the kanji character denoting "sea" or "marine" can be read as "Marin," while a name combining a kanji character meaning "light" or "glitter" and a character conventionally read as "chu" can be read as "Pikachu," as these cases can be deemed as having links between the kanji and their readings.
mainichi.jp
www.japantimes.co.jp
In one cited example of so-called kirakira (sparkly) names, it would be acceptable for the kanji characters 光宙 read as pikachū, which could be a hit for fans of the Pokemon universe. [...] As an example, a Justice Ministry official said 大空 — usually read as о̄zora (sky) — could also be read as sukai (sky). Another acceptable example was to read 光宙 as pikachū. Together, this particular pair of characters doesn't have a conventional reading. However the character 光 (light) is associated with the Japanese onomatopoeia pikapika, which refers to something bright and shiny. Together with the character 宙, which can be phonetically read as chū, a creative interpretation of kanji combo can be read as pikachū.
On the other hand, the provided example of an unacceptable reading was 山田太郎 — normally read as Yamada Taro — being interpreted as tetsuwan atomu, the name of the main character in "Astro Boy" anime series. The characters have has nothing to do with the meaning of the kanji, nor is there a historical or modern reading close to tetsuwan atomu, and so therefore this interpretation would be rejected.

'Pikachu' could be acceptable reading of name ahead of Japan law change - The Mainichi
TOKYO -- A subcommittee of an advisory body to Japan's justice minister, which has been discussing rules for a new system to incorporate phonetic char

Baby Pikachu? Japan panel weighs accepting unconventional readings of kanji for names
The proposal is part of the Justice Ministry’s push to digitize the family register by adding phonetic readings to kanji names.