Japanese cruiser capacity depended on yard investment

Could Japan have built more cruisers during the 1920s?

Probably one or two, but only with extra yard investment and a willingness to distribute government work beyond politically favored builders.

There was limited room at the edge of the historical program rather than a large reserve of unused capacity. Additional ships would require money for the yards as well as hull funding. Some capable Japanese builders were disadvantaged because procurement followed family and political relationships, leaving useful industrial capacity underemployed. The comparison with Britain's Thames Ironworks shows how naval policy can lose a productive yard even during an international building race.