Confinement improvement of ~20% from the ISS95 scaling law has been observed in the outwardly shifted configuration on the local island divertor (LID) experiment. In the configuration, highly peaked electron density profiles, together with peaked electron temperature profiles, are established with hydrogen pellet injection. A steep density gradient is formed in the internal region near the rational surface of q = 2 in the density decay phase after pellet injection. The plasma stored energy or central beta value increases and reaches its maximum as the density decreases, which is typical behavior of the reheat mode. Because of the increase in the central pressure, a large Shafranov shift is observed in the electron temperature and density profiles measured with a Thomson scattering system, suggesting the formation of the internal transport barrier during the LID discharge. Such better confinement has never been seen in inwardly shifted configurations. The reason for that is discussed taking the energy and particle transport into consideration. Recent results from a modeling study with the EMC3-EIRENE code are also presented.