The Japanese opinion (probably a consensus) that the submarine for Australia should not be made using extremely difficult to weld (and highly national security sensitive) NS110 Japanese submarine steel opens up a range of "not build/assemble in Japan" production possibilities. One possibility in Japan's response to the CEP is "assemble in Australia".
I'm increasingly interpreting Japan's intention as Japan manufacturing the submarine parts in Japan. These parts will involve an easier to weld (lower than NS110 value) pressure hull steel. Then the parts will be shipped to ASC-Adelaide and perhaps other Australian shipyards. Then assembled, including welded together, in Adelaide.
JAPANESE RESPONSES IN MORE DETAIL
At http://gentleseas.blogspot.com.au/2015/08/7-problems-with-japanese-option.html in Comments on August 23, 2015 at 11:42 AM a Japanese representative (possibly from the Japanese Ministry of Defence) responded to Australian Made Defence’s "7 Problems [Questions in red] With The Japanese Option" I have asked follow-up questions at 2 and 6.
In the case of knock-down production [of Japanese submarines in Australia?]. The Japanese responder does not think that an additional new shipyard is required. A professional engineer team of KHI and MHI as field [superintendents-managers would visit the] Australian Submarine Corporation. [They would provide guidance for] Australian engineers on welding and assembling of steels, materials and parts from Japan.