Most Japanese devs other than Capcom, Square and Kojima are not willing spend crazy amount of budget for graphics like western devs do. Their priorities are different than western devs and it also helps them sales their games reasonably well without needing to do COD numbers in order to be successful.
They need to keep this up. Sure we can have a few studios over there with strong graphics, but I'd rather have a fun, deep, engaging rpg than something that is just flash bang and shallow.
As much as I love Dragons Dogma 2, FF16, FF7r, Rise of Ronin, RE8, RE2 remake, Stellar Blade, Nier Automata, Silent hill 2 remake (I know not japanese dev, but still),
I love:
Y's X, Trials of Mana, Triangle Strategy, Unicorn Overlord, Valkyria chronicles, Romancing Saga 2, EDF 5/6, Dragon Quest 11, DQ Builders series, DQ Monster series, Octopath Traveler, Fire Emblem, Atelier, Tales of , Gravity Rush, and Disgaea series. (listing what I like, there are tons smaller games that I don't care for too) ,
We get more of these 2nd style games. In the time we get 1 game from a western studio, Japanese devs have given multiple games.
Y's after last gen (y's7), got Y's 8, Y's 9, Y's origin, Y's 10. Disgaea got Disgaea 5-> 7, EDF 4.1-> 5-> 6. More games in less time due to not having insane graphic requirements. It also means lots of games on the switch or steam deck.