
Stephanie C. answered 06/19/19
B.A. in English, University of Arizona, specializing in literature
Both phrases mean the same functionally. Neither is explicitly more "literary". The difference is in the tone and emphasis.
"It was then that" is a more florid phrasing, whereas "that was when" is simpler and more direct in tone. As a writer, you would chose a phrasing that works best with your style or, if it's a piece of dialogue, works best as how you imagine your character would express themselves. For example, a police report in a crime novel probably wouldn't use such ornamental language as the first example, but perhaps the inner monologue of a daydreaming young person would be more fanciful.
Also, the the first example emphasizes the significance of WHEN, (it was THEN that...), whereas the second places more emphasis on the WHAT, (that was when HE SPOTTED THE MAN.)
I'm not familiar with Japanese, but my guess would be that it's a quirk of translation or perhaps a choice that reflects Japanese syntax.