noun-modifying (irregular)
resident in Japan; stationed in Japan
Used prenominally for foreign ambassadors, government officials, military personnel, or correspondents who are stationed in Japan. Common in phrases like 駐日大使 (ambassador to Japan) and 駐日米軍 (US forces in Japan).
駐日大使が記者会見を開いた。
The ambassador to Japan held a press conference.
The U.S. Ambassador to Japan held a press conference.
駐日米軍基地の返還が議論されている。
The return of US military bases in Japan is being discussed.
The Embassy of France in Japan is located in Tokyo.
駐在 means to be stationed or posted (usually of a company employee or officer) and is a full verb/noun, whereas 駐日 is a prenominal modifier meaning specifically 'stationed in Japan'.
ambassador to Japan
Compound of 駐 (ちゅう, 'to stay, be stationed') and 日 (にち, abbreviation of 日本, 'Japan'). The reading ちゅうにち follows standard on'yomi.