TOKYO—A flotilla of nearly 50 Taiwanese boats entered territorial waters near disputed islands controlled by Japan in the East China Sea on Tuesday as another Asian neighbor protested the Japanese government's purchase of the islands.

About 40 Taiwanese fishing boats and eight Taiwanese coast guard boats entered the territorial waters near the largest of the disputed islands, Uotsuri island, on Tuesday morning, the Japan Coast Guard said. It was the first time ships from Taiwan have entered the waters since the Japanese government...