Is N1 the new N2? Changes in hiring trends?

I have been talking with a couple of Japanese recruiters and most of them 満場一致(thats a new word i learned last week haha and it means unanimously) told me that Japanese companies wouldn’t hire a foreigner if they do not have N1 and that N2 wouldn’t suffice. Even my company included N1 as a hiring criteria (it was N2 when I joined)

My question: Is this because the industry is not in a good shape and they just wanna filter out as much as they can or is something else going on?

Edit: the industry I am talking about is IT(software development)

by borndreamdie