With most roads limited to 60km/h there is indeed little need for a lot of power. It took over two decades for them to raise their highway speed limits from 100km/h to 120km/h. The HR-V still has better power-to-weight ratio than most cars sold in Japan.Malaysian and Indonesian versions have the 1.5T lol.
I swear the average Japanese consumers don't have much demands on engine performance, it's like as long as it can move, even just barely, and use very little fuel it's good enough for them.