I am planning to build a timber frame home in the Japanese style with the posts exposed both inside and outside. I was hoping to use stress skin panels between the posts for walls and am wondering if it would be acceptable to groove the surrounding timbers, say an inch deep, to hold the panels in place between the posts. One fear I have is that as the posts dry and weather, they will want to change shape, though the panels will contrain this movement. Any comments on using this method to install the panels? Thanks.

I would be very careful using "standard" panels in this way. For the most part, stress skin enclosures (key word) are meant to be air tight. That is why you often see the need for air to air heat exchangers in smaller homes using stress skins. If you break the "seal" with every post you have a high probability of condensation occuring where warm air tries to get in or out.

I would suggest looking into a more permeable enclosure system like straw/mud or wattle and daub. Of course any wall system you consider should be based on what works where you are building. Exposed timber is common in Europe, but many areas in the US have climates that degrade exposed timber rapidly.

Good luck with your project, and show the highest respect for your timbers when you are building in the Japanese tradition.

Rudy