I graduated one of the top schools in Japan and went to the US to get a PhD. (But somehow I got patriotic and came back to Japan after that, don't judge me.) In many ways, Japan feels like a gridlocked country. And people (especially young) already know it but can't do anything about it. I'll point out that the heart of the problem is its lifetime employment system, which the entire economy and social system of Japan is optimized for and depending upon.

So you wanna change schools? You have to change the system and reposition many teachers, but nope, it's not allowed. Teachers are well protected by the Japanese labor law and they can't do any other job (and from what I saw they're particularly inflexible work force). You want more diverse students? Good luck with finding a good career path for them, because under the lifetime employment system you can get good choices only when you're young, and you have to stay in the same company for the rest of your life. Again, many people assume that way and many financial systems in Japan are built upon this assumption. And finally, you want many more competitive researchers? Nooo, because there are too many mediocre researchers that have tenure already. You can't compete with them. Again, blame the lifetime employment system.

I, too, honestly don't know what's a good exit path from this. Personally I think having more immigrants is a way to go, but then there's this right-wing people and Trumpism going rampage right now. Sigh.