The answer primarily has to do with the low prioritization of SMGs in Japan's war production, and because of the rather haphazard state of Japan's industry. Unlike rifles, machine guns required some pretty sophisticated manufacturing techniques and machine parts in order to achieve the desired rate of fire. Submachine guns and machine pistols required even more sophisticated and more precise manufacturing as well, something that Japan was weaker in than most of the other Great Powers leading up to WW2.

While experimentation with handheld automatic weapons had started in Japan in the 1920s, the Mukden incident of 1931 led to a dramatic reevaluation of Japanese wartime industry and a reallocation of resources to produce weapons in the near term, rather than research products for the longer term. SMG development thus remained a low priority for Japan's arms industry, which already had to cope with internal divisions between the Japanese Army and Navy which used slightly different ammunition and slightly different rifles, thus negating any potential economy of scale savings.

In the course of their research, the Nambu Arms Manufactory, one of Japan's small-arms producers, determined that to mimic the foreign experimental SMGs would be too inefficient and would require retooling to produce specific ammunition just for this one weapon. Rather than do so, they chose to utilize pistol bullets instead, which while certainly worked also meant that they would need to essentially build an SMG around this particular ammunition type, rather than adapt the ammunition to the SMG. This slowed down research progress, especially with the low budget priority this avenue of development was given. By 1938, Japan had managed to produce a small number of machine pistols, the Type II Experimental, which was issued to some of the troops participating in the Battle of Shanghai and the early battles of the Sino-Japanese War. It was found that the gun had severe issues, including the tendency to jam, thus sending the researchers back to the drawing board. It wasn't until 1941 that the Type 100 SMG made it into production, and due to limited manufacturing capacity it primarily was issued to elite formations like paratroopers, as well as to officers and artillery crews to repel attackers. It is also thought that of the limited production runs, a good amount ended up on the bottom of the sea as the ships carrying them were sunk by Allied anti-shipping campaigns.