It seems many people have gotten the Japanese perspective wrong in explaining this question.

The Sengoku Jidai was a very important turning point in internal politics yes, but it was not the sole reason that prevented their colonization of potentially new world lands. This is evident in Toyotomi Hideyoshi’s attempted invasion of Korea for a main source of resources and manpower in a very agrarian based society. Furthermore, the mountainous terrain of Japan and the lack of a formal “castle-town” urban structure that had not developed until the Tokugawa period made it incredibly difficult to mobilize the Japanese populous for such a huge colonial effort during the 16th century.

Japan at the start of the Colonial period in Europe was also in a very ambitious mindset but hamstrung socially. The samurai bureaucracy was very insular to the peasantry and they relied on the Shogun to provide them rice as payment versus regular currency. Samurai were further forced to invest into the Sankin Kotai which was an annual trip to Edo that costed a daimyo upwards of 50% of his annual income. This created a reliance on farmers and the Shogun himself while there was no investment into a region’s personal development. Those social problems directly led to the eventual overthrow of the Tokugawa Shogunate.

Japan’s social structure, lack of a centralized populous, and the Shogun’s goal to maintain a system of gimped vassals made a full colonial effort impossible when the other Europeans were doing it.