Many iPhone 7 users outside of Japan hoped that iOS 11 would enable NFC-F hardware functionality which all iPhone 7 and Apple Watch Series 2 have, so that overseas iPhone 7 models could join the iPhone 8/iPhone X global FeliCa party. iOS 11 arrived but iPhone 7 FeliCa remains a Japan model only feature. Why?
The silly reason is that overseas iPhone 7 models do not have the legally required Japanese MIC certification mark engraved on the case like the Japanese models. The real reasons are that Apple probably does not want to spend resources obtaining new global certification just for NFC-F in an older iPhone model. And of course Apple wants to give iPhone 7 users an excuse to upgrade.
In retrospect iPhone 7 was a transition to global NFC (A-B-F) model. The hardware was in place but iOS 10 Apple Pay did not have NFC switching ready. The iOS 10 Region setting assigned the NFC mode when adding cards to Wallet: NFC-F for Japan, NFC-A/B for other countries.
If you have your heart set on using Apple Pay Suica when you visit Japan but don’t want to upgrade to a global FeliCa iPhone, Apple Watch Series 3 is the less expensive option.