Nobody knows (or is telling), but he, she or they invented the Bitcoin protocol
Satoshi Nakamoto was a pseudonymous developer that published a paper describing the Bitcoin protocol in detail via the Cryptography Mailing List in November 2008 and released the first version of the bitcoin software client in 2009. The software was released as open-source and the original paper can be found on the bitcoin.org website here.
Nobody knows if Satoshi Nakamoto was a male, a female or a group of people (or even a government organization) though many theories exist. The last time anybody heard from him was in the spring of 2011 when he posted a message saying he had moved on to other things. Until that time he was part of the project development team, however by the end of 2010 he had all but disappeared.
Some people say that it isn't important who he was and perhaps it is good that there is so much mystery because it keeps the focus on the technology and not on the people behind the technology. Whoever he was, he, she or they were responsible for inventing the Bitcoin protocol.
It does sound Japanese. In fact in Japanese "Satoshi" means "clear thinking, quick witted or wise". “Naka” can mean “medium, inside, or relationship”. “Moto” can mean “origin”, or “foundation”. Those things would all apply to the person who founded a movement by designing a clever algorithm.
Some people have interpreted his name as meaning "Central Intelligence" and concluded he must have been working for the government. However, perhaps it doesn't matter. Core developer Jeff Garzik puts it succinctly.
“Satoshi published an open source system for the purpose that you didn’t have to know who he was, and trust who he was, or care about his knowledge,” he points out. Open source code makes it impossible to hide secrets. “The source code spoke for itself.”