There was a common belief among GIs in the PTO that the Japanese, always thought capable of any dirty tricks, loaded their ammunition with wooden bullets so that when Americans were shot, the bullet could not be detected by X-ray and the American would die of gangrene. No one seemed to consider that a wooden bullet would have short range, poor accuracy and little power.
While there is no doubt about the cruelty of some Japanese officers and soldiers, and the war crimes committed by them, the "wooden bullet" story is not true. The Japanese (also Germans, Swedes, and other countries) used hollow wooden bullets as training blanks, and the Japanese also used them as grenade launcher blanks. Since part of the powder charge filled the hollow in the wood bullet and ignited, the bullet simply blew to powder even before it left the barrel.
But Americans who captured some of that ammunition had no idea what it was for (U.S. grenade launcher blanks used a crimped case mouth) and invented the "wooden bullet" story.
There were other common myths about the Japanese, some believed even by Americans who faced them. One that seems to be true, or at least could have been true, is that Japanese 7.7 ammunition could be loaded and fired in U.S. rifles and that the Japanese clip would even work in the M1903 Springfield. Having heard that from what I considered a reliable source, I tried it. Sure enough, the clip worked, the 7.7 rounds (Norma) fed perfectly and fired without even any serious signs of high pressure. The necks are short, but otherwise the fired cases look normal.
Edited to add: I just read the post by Hunter and can only say that the sources cited are examples of the way a story builds, with a kernel of truth and a lot of inventiveness, from "I heard" to "Joe said" to "I was there" to "I was shot with..." The usual progress of the rumor and myth. FWIW, the use of blanks for executions was common with both the Germans and the Russians. The powder charge does the job at close range, and there is no need to worry about danger to anyone except the poor victim.
Jim