All output XML is encoded as UTF-8. To present non-ascii characters you will have to use a font that support the characters/glyphs you want.
On the reports servers we currently support a font called Unifont (http://unifoundry.com/unifont.html) which supports most of the multibyte space of glyphs.
To use this from XF designer add this to the font-family like shown in picture below. Specifying both at "normal" font and the unifont in the same family will make the renderer go to unifont for all glyphs that is not found in the first font.
The quality of the Unifont is not great and also might not suite you language, so it might be necessary to use a different font. Pleas contact us if you need to install this on the server.