Hands up for those who think Japan make better horror movie. I for one will be scared s*it whenever I watch Japanese horror movie. Their sounds and effects really terrifies me. If you have seen "The Ring" (Japanese version) and "The Grudge" (Hollywood), which one is more scary to you?
I don't think it has anything strictly to do with either Japan or Hollywood. Both Japan and the United States have many talents. It just so happens that the films that got publicized are one that belong to a particular style. Personally, I don't quite like Japan horror clicks. Those from hollywood are more ok - but horror is not really my kind of genre. :P