To use UTF-8, changed from English to "UTF-8" or "Japanese" or "Korean" under Setup->General menu.

When the Language "UTF-8" is selected, below function can not be used beside Japanese setting.

If you set the Language "Japanese" or "Korean", select "Terminal" from the Tera Term "Setup" menu. Inside the dialog-box, select "UTF-8" from "Kanji(receive)" or "Kanji(transmit)". There is no need to restart Tera Term to activate these configuration changes.
When "UTF8" is specified with '/KT' or '/KR' option in the command line, UTF-8 encoding/decoding can be used during transmitting and receiving of data.

Actually, Tera Term does not support completely Unicode language because the internal design is based on MBCS(Multiple Byte Character Set). So, the Unicode characters are two-step conversion as follows.

UTF-8 <-----> Unicode(UTF-16LE) <-----> MBCS
        (1)                       (2)

(1): Tera Term can not support the surrogate pair and the combining character because the application does not convert UTF-8 byte sequence over three bytes.
(2): A user must specify the locale to convert the characters between Unicode and MBCS.

To enable Unicode character sets with the localized language, you have to set properly the locale parameters in the 'teraterm.ini' file. See example of these values below.

; Locale for Unicode
Locale = japanese

To change this value, you can use [Locale] in "Terminal setup" dialog-box.

Check the following web-sites to learn more about setting of locale in Tera Term:

Example of WindowsXP Simplified Chinese

Example of WindowsXP USA

; Locale for Unicode
Locale = american

And you have to configure the font setting correctly to display MBCS.
You can choose a font from Setup->Font dialog-box. Select a font that include characters what you want to display. And select "Script" what you want to display.
Tera Term can display other language characters if locale and font settings are correct. For example "Japanese" characters on "English" Windows, "Korean" characters on "Japanese" Windows.
But Tera Term doesn't support the multilingual display, and therefore it can't display "Japanese" and "Korean" at the same time on one Tera Term window.

[NOTE] for Mac OS X users

For Mac OS X(HFS+) use "UTF-8m" encoding. Currently it only supports receiving mode.
To use this mode specify "UTF8m" as the value of the command line parameter '/KR'.

[NOTE] Language Strings for Locale

Primary language Sub-language Language string
Chinese Chinese "chinese"
Chinese Chinese (simplified) "chinese-simplified" or "chs"
Chinese Chinese (traditional) "chinese-traditional" or "cht"
Czech Czech "csy" or "czech"
Danish Danish "dan" or "danish"
Dutch Dutch (default) "dutch" or "nld"
Dutch Dutch (Belgium) "belgian", "dutch-belgian", or "nlb"
English English (default) "english"
English English (Australia) "australian", "ena", or "english-aus"
English English (Canada) "canadian", "enc", or "english-can"
English English (New Zealand) "english-nz" or "enz"
English English (United Kingdom) "eng", "english-uk", or "uk"
English English (United States) "american", "american english", "american-english", "english-american", "english-us", "english-usa", "enu", "us", or "usa"
Finnish Finnish "fin" or "finnish"
French French (default) "fra" or "french"
French French (Belgium) "frb" or "french-belgian"
French French (Canada) "frc" or "french-canadian"
French French (Switzerland) "french-swiss" or "frs"
German German (default) "deu" or "german"
German German (Austria) "dea" or "german-austrian"
German German (Switzerland) "des", "german-swiss", or "swiss"
Greek Greek "ell" or "greek"
Hungarian Hungarian "hun" or "hungarian"
Icelandic Icelandic "icelandic" or "isl"
Italian Italian (default) "ita" or "italian"
Italian Italian (Switzerland) "italian-swiss" or "its"
Japanese Japanese "japanese" or "jpn"
Korean Korean "kor" or "korean"
Norwegian Norwegian (default) "norwegian"
Norwegian Norwegian (Bokmal) "nor" or "norwegian-bokmal"
Norwegian Norwegian (Nynorsk) "non" or "norwegian-nynorsk"
Polish Polish "plk" or "polish"
Portuguese Portuguese (default) "portuguese" or "ptg"
Portuguese Portuguese (Brazil) "portuguese-brazilian" or "ptb"
Russian Russian (default) "rus" or "russian"
Slovak Slovak "sky" or "slovak"
Spanish Spanish (default) "esp" or "spanish"
Spanish Spanish (Mexico) "esm" or "spanish-mexican"
Spanish Spanish (Modern) "esn" or "spanish-modern"
Swedish Swedish "sve" or "swedish"
Turkish Turkish "trk" or "turkish"