Much the same as anything else.
Assuming you have the game you want.
You get to find the text. Most of the time it will be text but sometimes it can be graphical. For Roman character using languages you have potent tricks like relative search http://www.romhacking.net/utilities/513/
but Japanese can be a bit more tricky as it does not necessarily use the same things.
For German you might be lucky and find yourself not needing to edit the font -- most Japanese games barely include a usable English font so if you can dodge having Å and umlauts you might get by, if you need such things then time to learn font editing.
Console games don't tend to handle text in a complicated manner as that takes CPU resources that are better used for fancy graphics, AI and whatever else. To this end we have pointers to consider. Pointers are much as the name implies and sections of data/code that point the way if you will to things within the file/file it caters for/ROM/iso/... Change the length of text in a line and everything after it is now shifted however much further or back, not good as it means you will possibly crash the game or miss things out. A section of pointers I usually liken to the contents page of a book, and has much the same effect if you start ripping pages out or stuffing new ones in. To this end you get to learn to change pointers as well for 99.99% of games.
You then get to figure out how to extract the text, and how to reinsert it afterwards (something that takes a bit of thought) and do all the necessary edits for your needs.
The PSP is a file system using console. Umdgen being the tool most use to explode the PSP ISO into its constituent files which gives you nice file names, extensions, sizes, directory names and more to consider.