This may be a silly question, but do I need a skirt or dress while I'm visiting Japan in July? We will be just site seeing.
Nope, can't see the need. I visited as a teenager, we just had shorts & pants. But if you want to wear one, of course you can!
Ok, that's great to know.
Just make sure you have some clothes for hot, humid weather. It is like a sauna here right now. Skirt might be quite comfortable...
Bear in mind that you may be in situations that call for your crossing your legs on "tatami" (woven rice-fiber floor mats) or kneeling! Go with a knee-length skirt or longer to allow for "coverage" :-) Since July can get "beastly" hot - the way Cincinnati was this past weekend when I was there - that'd be preferable to jeans or any other kind of pants.
Wear whatever's comfortable. The heat/humidity will turn your underwear into paper mache. Maybe one nice outfit if you plan to go out somewhere nice. If you're in urban environments, I think you really have to go out of your way to sit on tatami floors.