their culture. it is not conducive to building individuality. MMA is an individual sport. their society is not particularly conducive to violence. it's that simple. sure, not cutting weight and whatever, but you have to be an animal in fighting. you have to be like Kid Yamamoto, or Takanori Gomi. these guys wanted to smash your face.
it's like asking why there's so many Samoan fighters when Samoa is WAY smaller than Japan. that's because Samoa's entire culture is built around violence and fighting. you come from a violent warrior society, guess what, you get violent warriors.
Japan has one of the most vicious finishers in boxing in Naoya Inoue. They have good boxers in lower weight classes in boxing. They are big in Kick boxing and literally has the biggest MMA org outside of the UFC. They love their combat sports.
The main issue is the lack of wrestling and their size or lack there of. There's just not many big Japanese people that compete in MMA. And in the lower weight classes they would have to be really superb wrestlers to compete with wrestlers from western countries.
