How do the Japanese limit European trade in Japan

By adopting isolationist policies.

Explanation:

During the Edo-period, the government of japan closed many trading routes that the European Merchants used to pass to sell their goods in Japan. This cause a decrease in the Overall Income of the European countries targeted by the policy.

The reasoning behind it was the government at that time wanted Japanese people to produce their own goods rather than spending many expenses purchasing products from western countries. On top of that, the Japanese couldn't fully trust the European people. They suspected that they wanted to slowly conquer japan and turned it into a colony.