Yes. But find me a japanese publisher willing to pay hundreds of millions of dollars on a project and the technical capability to craft an inhouse modern engine. You can't, the closest is square enix and they pretty much failed with luminous (plus that shit looks dated now)
Problem with piroteraty engine(idk how to pronounce that and I don't want to bust out dictionary) is that it is really hard to keep improving without fucking up the whole pipeline. Japan studios don't have buying power, unless they are Nintendo. You can't afford pumping out less games since it gonna fuck the revenue sources.
Most technilogical advanced Jap game is well, Death Stranding(its engine housed from Grurilla), Resident Evil and Gran Turismo.
GT started development from GT5(in-game tellessation, planar lighting, etc). The improvment in car models, track fidelity comes later. So basically it take them 8 years to go from GT5 Prolouge to GT Sports.
RE:7 started development all the way in 2011. It is the pioneer thst made the breakthrough called RE Engine but MH World used the old engine which look really outdated now, like a PS3 game.(So 6 years of developement)
Konami used to have Fox which is light and have really impressive physics but we know how that went. Oh well.
Most Jap devs's engine ran by hope and dream, a few scraps, ductapes. From used the engine that they took from JPStudio back in Demon's Souls development. TeamNinja used the NG 2 engine through these days, essentially it is a fork of RenderWare that got de-commercialized by EA 10 years ago.
Everything now is UE. Even Luminious Engine is based on UE3. Dragon Engine is a fork of the UE2 engine too.
Also outsourcing to SEA requires smooth pipeline which upgrading engine could no afford.