Japanese Software development it's a weird beast.
On one side you have people that managed to squeeze the last bit of clock cycles and memory in video games in the 90s, without losing sight of the creativity and human interaction. And that's rare, usually, people and teams are great in the technical space, or great on the abstract emotional one, but not both. A lot of them are a masterclass in UX that need not tutorials for complex topics.
On the other hand, most of the Apps outside entertainment are only made by and for the Japanese market. I can not recall many recent names outside of LINE in the software field (and after WhatsApp added stickers... begun to fade away in the west; Today, I know more that use WeChat / Signal than LINE).
But I don't think this it's a problem of lack of great developers or education (A lot of great CS papers, frameworks, and libraries are created by Japanese devs).
My bet on the problem is in how businesses work in Japan.
- They put a lot of effort into weird metrics hyper-focused on the local market
- A hierarchy that puts a lot of weight on tradition and forms, rather than results (ie "appear productive" doing a lot of office hours).
In defense of Japan, I would say that most industries outside of IT in the west, work kinda the same (MBAs for CTOs, etc).