During my last visit to the States, I was asked a number of times if I was happy to be in Japan. Well, the true answer was "no, not always" but that didn't mean that I was not joyful in being there. This seemed to create some confusion with some people because of the way I define Happiness and Joy. It doesn't help that the dictionary definition of both words seems very similar. However, let me try to explain the difference in meaning of how I use the words.
Happiness comes from experiencing something or doing something you really like. "I'm happy to see you." It is based on external events; varies from mere contentment to the ecstatic (this is often called "joy").
Joy comes from a true connection and intimate relationship with God. It seems to also be used un the bible to describe a relationship one has with others in Christ. "You are my pride and joy." It seems based more on an internal mindset; actually referes to the ecstatic range of pleasant emotion. It is a fruit of the Holy Spirit. (Galatians 5:22-23)
Here is a good verse that seems to compare the two...
You [God] have filled my heart with greater joy than when their grain and new wine abound. - Psalm 4:7 (NIV)
So "when their grain and new wine abound," that would be a "happy" time. But, God fills our heart with something greater... real lasting joy.
We have one of the greatest examples of this in the life of Jesus...
Let us fix our eyes on Jesus, the author and perfecter of our faith, who for the joy set before him endured the cross, scorning its shame, and sat down at the right hand of the throne of God. - Hebrews 12:2 (NIV)
I would find it hard to believe that anyone would be happy when forced to suffer through a public crucifixion. However, Jesus did so with joy.
Happiness is the small waves that crest from time to time in the ocean of our heart. While Joy is the deep driving under currents and tides that would continually swell and move us if we would only dwell in it.
This is just a quick study of the words Happiness and Joy. Feel free to contact me on your thoughts.