For me I personally think the downfall and declining popularity and appeal of Jpop overseas is contributed to several factors, and it's not just for 1 particular reason.
But 2 of the main reasons I think are:
1. The rise of idols and idol groups, during the last decade or so Jpop and the entire Japanese music industry has been monopolized and dominated by less talented idols and idol groups that are mainly marketed for their image and reputation and most of them lack real music & singing talent, they are all mostly about image. They may be popular in Japan right now but their lack of talents makes them much less appealing to most foreigners outside Japan. Unlike in past decades when the Japanese music industry was full of artists and musicians who actually have real talent and can actually sing and perform and make real great music, nowadays most of these talented artists and musicians are sadly being overshadowed by these talentless or less talented idols with crappy music most of the time
I have been a fan of Jpop for many years, and I love many of the talented Japanese artists and musicians, once people overlook all those idols and idol groups, they'd notice that Japan actually has many very talented artists who make good and even great music. But sadly most people who are unfamiliar with Jpop don't bother, nowadays when most foreigners think of Jpop, they would only know idol groups like AKB48 and the Johnny's groups mainly because of their fame in Japan. But in fact, idols and idol groups like them only account to about 30% or even less of Japan's entire music industry. Therefore many foreigners are just very ignorant of Jpop and all they know about Jpop are pretty much just a few idol groups they've heard about, and are largely unaware of the many talented Japanese artists who actually can sing and make good music. As a Jpop fan for many years, it really saddens me to see the Japanese music industry declining so much in quality and popularity and exposure
2. Japan is MUCH too strict with their copyright laws, unlike Korea which is much more lax with their copyright laws, you can find many Kpop and Korean videos online and they are widely available to view for free online worldwide with almost no repercussions. But Japan in comparison is such a stickler for copyright, they are just too strict that it's much harder to find a lot of Jpop videos online, unless they are short music videos uploaded online by the record companies themselves, or from illegal streaming sites that operate outside Japan. However most Jpop and Japanese videos in general still gets deleted online fairly quickly and periodically, there are strict penalties for people who upload these kinds of content. In Japan it's against the law to illegally upload videos of Jpop and Japanese TV shows etc online on streaming sites and people who upload them can get charged and locked in jail for it. The only way you can get Japanese content legally outside Japan is through legitimate channels and platforms that have licenses to air or upload these Japanese contents. But Jpop and Japanese stuff in general is still much less widely available worldwide than Kpop and Korean stuff is, so it's not surprising that Jpop has been declining and being vastly overshadowed by Kpop and Korean stuff worldwide nowadays.
But then again, this could also be because the Korean music industry in comparison is so tiny, it cannot sustain itself, it depends heavily on the popularity of Kpop overseas to make any kind of profit for itself. So Kpop needs all the profits and support from its overseas popularity in order to sustain itself. However the Japanese music industry in comparison is much bigger and it is big enough to support itself. After the US, Japan has the second largest music industry in the world, so it doesn't need profit or fame overseas to sustain itself, unlike Kpop does. Which is probably why Japan doesn't really care much about marketing or promoting its music industry overseas, it is large enough to support itself. But still I wish Japan would put more effort into promoting its music and artists overseas more, even if Japan thinks their music industry is big enough and doesn't need profit from overseas, but it would certainly benefit the Japanese music industry even more if they market/promote their music overseas more, it would definitely help to bring more recognition and support for Jpop overseas.
Japan still has anime which is still vastly popular worldwide today, and in terms of Japanese pop culture, I think anime is still by far Japan's most popular pop culture export to the world. But Jpop? Not anymore unfortunately.
And regarding the whole topic about having more sex or sexy tones in Japanese music nowadays being discussed on the first page of this thread, I think that is a big misconception. There are only a very few amount of Japanese artists and idol groups who use sex or sexy tones in their music or image, Koda Kumi is one of these such artists, but there's really not many of them at all. Although there are some Japanese idol groups that are changing their image into a "sexier" style in order to express a more "mature" image, sadly in Japan, the visual appearance of "sexy" is often superficially considered a representation of "maturity".
But the vast majority of Japanese idol groups and actual music artists I've listened to, do NOT use the image of sex or sexy tones in their music & style, there's only a handful of them who do. And believe me, for a fan who has loved Jpop for almost 20 years now, I have heard ALOT of Japanese idols and artists in my life. It really just depends on who you choose to listen to, it's important to choose carefully and wisely.