In the full interview about Kingdom Hearts 2.5 HD Remix, Famitsu asked Nomura on a status update on the development of Kingdom Hearts III. In his answer, Nomura stated that development was proceeding as planned, however the team is no longer using the Luminous Engine and have switched to the Unreal Engine 4 for a variety of reasons. He says that because of this switch there have been having some graphical rendering issues but that Epic Games is working closely with the development team to resolve them.
Famitsu Interview. Translation regarding the change to the Unreal Engine courtesy of duckroll at NeoGAF.
Kingdom Hearts III is now using Unreal Engine 4