From what I'm reading from the more candid Japanese interviews (such as with Feelplus and Capcom employees in both this gen and last gen), the big name Japanese developers are under a lot of pressure to gain a foothold in the Western market. They are having difficulty getting new ideas approved (and if they are approved, they have to work under severe budget and time constraints) with the higher ups saying (not without merit) that "it won't sell here or it's just too expensive." The funny thing is that this was already bad during them middle of the PS2 era when Western developers started to gain more of a stranglehold in overseas markets. Back then in the company, there was a quite a bit hysteria with talk of mergers (such as the speculated Capcom-Konami merger) and budget constraints. The move to HD just exacerbated these issues.
A Capcom employee, who worked on Shadow of Rome IIRC, talked about how important it was for the company to be competitive in the overseas market. He had been working the industry for a quite long time and talked about the rise and fall of Japanese game companies. He talked about how a company (he talked about companies in general, not just game companies) would peak and fall when its costs began to outstrip their revenues. Instead of spending more money in trying to gain more customers or gaining ground in new markets with new games, the company would turtle up by cutting budgets and concentrating on reliable (but dead-end) markets with reliable games (that would not necessarily grow in sales). Eventually, the company would go belly up since their reliable but small market wouldn't be able to sustain them.
I recall one developer who compared the Japanese game industry to the Japanese movie industry. Japanese movies have to be made under certain budget and creative restrictions (it can't afford to be too 'un-Japanese' since it will alienate the local audience and you don't have a foreign market to fall back on) since they can mostly count on Japan box office and DVD sales. Similarly, it's getting difficult to fund Japanese games in HD since the Japanese market for those types of games is stagnating, or more likely, shrinking.
We'll also have to go into Japanese expectations of the 360. Feelplus's president, Ray Nakazato, talked about the original Japanese expectations on the 360 before (he has worked in both the US and Japanese game industry so he has a very unique view on the situation). Many Japanese developers wanted to stay at the sidelines and see how the generation worked out. However, a few expected the 360 to be a big hit worldwide. It wasn't anywhere as big a hit in Japan as some wished but it provided a springboard for Japanese developers to get sales from the overseas market. When it became clear the PS3 would be nowhere near as successful as the PS2, companies concerned more with growth rather than bottom line profit began to see the 360 as a viable platform.
We recently had Inafune come out and say outright that they heavily supported the 360 (and made the controversial decision to have some 360 exclusivity and break Playstation exclusivity with several of their big franchises) because it was adamant that Capcom gain significant success in the Western market. On the other hand, many other developers don't have the same luxuries as Capcom and are desperate to gain foothold in the West, even if it comes at the cost of the Japanese market. If it means going 360 exclusive (whether is it moneyhats, lower costs, earlier devkits, a 360 centered engine that is ready to go or any combination), they'll do that.