Schmidt retained only halfbacks Tane Edmed and Jake Gordon from the team that lost to New Zealand at the end of the Rugby Championship with flanker Nick Champion de Crespigny captaining the new-look side in his third test.
New Zealander Schmidt said that although he had a healthy respect for Japan, there was a limit to what he could ask of players with tests against England, Italy, Ireland and France to come before the end of November.
"We have already had 10 test matches, three against a big team like the British and Irish lions, the Rugby Championship, all big teams, and Fiji, who are very physical, so there is a degree of fatigue," Schmidt told a news conference in Tokyo on Thursday.
"I think it's just trying to get everyone to the finish line. I know last year, by the time we got to the second half of the Irish test match, the players were willing, but energy levels were just starting to taper a little bit.
"There's definitely a risk and I guess part of the job of the coaching staff is to manage the risk as best we can."
Schmidt said Champion de Crespigny was already part of the squad's leadership group and won out over Gordon as captain because the scrumhalf was focused getting his game right after his recent return from injury.
Regular skipper Harry Wilson was named on the bench with Rob Valetini coming into the back row at number eight alongside Carlo Tizzano, who stands in for Fraser McReight at openside flanker.
Hunter Paisami and Josh Flook form a new-look centre partnership in the absence of Joseph Suaalii, who is rested, and Len Ikitau, who has moved to England to join his new club Exeter.
There was no place among the replacements for flyhalf Carter Gordon, who was rushed straight back into the squad a few hours after returning to rugby union from the National Rugby League.
"Carter's had three trainings with us, and in such a pivotal position in the team, it's very hard to go straight in and start leading," Schmidt added.
"There was a temptation to put him into the matchday squad, and at the same time, we're just kind of looking after him."
Hamish Stewart will cover flyhalf Edmed and the centre positions from the bench, which also features loosehead prop Aidan Ross.
Ross, who was born in Australia but represented New Zealand in one test in 2022, will become the fifth man to play for both the All Blacks and Wallabies when he comes on to replace Angus Bell, Rugby Australia said.
Wallabies team to play Japan
15–Andrew Kellaway, 14–Corey Toole, 13–Josh Flook, 12–Hunter Paisami, 11–Dylan Pietsch, 10–Tane Edmed, 9–Jake Gordon
8–Rob Valetini, 7–Carlo Tizzano, 6–Nick Champion de Crespigny, 5–Lukhan Salakaia-Loto, 4–Jeremy Williams, 3–Zane Nonggorr, 2–Josh Nasser, 1–Angus Bell
Replacements: 16–Billy Pollard, 17–Aidan Ross, 18–Tom Robertson, 19–Josh Canham, 20–Harry Wilson, 21–Ryan Lonergan, 22–Hamish Stewart, 23–Filipo Daugunu