Emissions laws for new cars in Japan actually lag behind the USA somewhat.

The USA has really stringent federal standards for new cars, but enforcement for cars that have already been sold is left up to the states and with a few exceptions most of these states have pretty low standards for what actually comes out the tailpipe. Hell, most states have given up on tailpipe testing entirely for OBD-II ('96 or newer) cars and just scan the diagnostic port. If you have no trouble codes, you're good to go. So here in the USA, the standards for new cars have to be really high to make up for the old clunkers doing the polluting.

The difference in Japan is their standards for non-new cars are much more stringent. They have an inspection 3 years down the line which is really hard to pass and that is why you see all these used JDM engines and other parts showing up here in the USA. It's cheaper to sell the car to a hobbyist, or sell it for parts, than to keep it on the road.

In Japan, they didn't bring their emissions standards for new cars up to the same level as the USA until the 2003 model year. That's why almost all of the high performance turbocharged Japanese cars were sold in the domestic market through 2002 and were then killed off. In 2002 you could still buy a Mazda RX-7, Toyota Supra Turbo, Nissan 300ZX Twin Turbo, Skyline GT-R, 180SX, Silvia, etc. Now with the shift to USA-equivalent emissions standards for new cars, the market for performance cars over in Japan is almost dead.

The horsepower thing has nothing to do with emissions though, it's just what the Japanese companies feel would be socially responsible to sell. Some of the cars are just rated at 276 hp but actually make a bunch more, and some of the cars are truly downgraded. For example the JDM version of the MkIV Supra Turbo ran lower boost and smaller injectors than the USDM version; a common upgrade is therefore to convert to USDM spec and do the BPU upgrades.