My basic understanding of Japanese smithing is that the Japanese used very advanced crafting techniques, but the iron ore native to Japan was generally poor quality compared to European ores. After establishing trade with European countries, did Japanese blacksmiths incorporate European metals into their techniques?
From my understanding, the raw materials are merely rare in Japan, not of bad quality. And impurities would be filtered out during smelting. An excerpt from Katana: The Japanese. Sword by Stephen Turnbull:
the raw material for a Japanese sword came from the surrounding environment. Beside some rivers in coastal areas, particularly along the edges of the Inland Sea, were to be found deposits of satetsu (iron sand). The term itself indicates the composition of the sand. This rare ore would be smelted in small primitive furnaces at 1300-1500C to produce tamara hagane (raw steel pieces). The best pieces, with a carbon content of 0.3-0.5%, were then beaten into thin cakes, and the expert tosho would select the ones most suitable for swordmaking.
He then goes on explaining the relationship of carbon and iron in steel and how Japanese swordmakers had an uncanny ability to produce the perfect ratio despite having no way to measure these things. The swordmakers wore white outfits similar to priests, to show they were working in accordance with the gods. With such precision, seems about right!