Then you just make the gameplay incredibly easy for JP players and easy for NA... I don't want encounters where I have 3+ seconds to react. Gameplay shouldn't be made easier just because some players have a really bad latency. (and I'm EU :d). What's next after that? Players in South Africa or something will start asking to have encounters tailored for them so they can complete them fine with their latency? No thanks.
Just do like every other company around is doing, have localized servers and have a gameplay that rely on mechanisms that require tight timings.
They're just going for what's logical for any MMO company out there, have servers next to where most of your customers are. Improving pathing, again, will never provide the same results as having localized servers. I really would like you to find me some facts where latency from Western Europe > Tokyo can be reduced below 150ms, at an affordable cost.
Best figures I have found are 170ms from London to Tokyo, and that stuff is mostly dedicated for traders... Not for a video game company having customers that pays £10 a month and want to defeat virtual monsters more efficiently. We're talking money here.
Then you will have to add the latency from [EU customer home] to London. For a Londonian, that could be as low as 10ms. Roughly add 20~50ms for someone in the UK (outside London) to most of Western Europe (Paris, Berlin, etc.).
So at best latency would be reduced roughly by 100ms by using this technique (I currently have ~280ms from London to Tokyo). I don't even see the point, even having servers on US West Coast would yield better results for any EU players (and at least provide low latency to NA players :d).