The Japanese used western imported iron a lot, as well as western imported guns.

It's difficult to get historic figures for this, but in the early 20th century anywhere between 70-90 percent of iron ore used in Japan was imported, and even almost 100% in some years. There's highly likely to be history to this importing going back a long while. https://d-arch.ide.go.jp/je_archive/english/society/wp_je_unu33.html

Tamahagane steel, the stuff produced from sand, was likely much more popular for ceremonial blades whereas imported steel for blades meant for actual combat. This means the historic examples we have left are more likely to be Tamahagane steel, but if a western swordsman and a Japanese swordsmen were in a position to fight, both would likely be using steel of a similar quality as they would both be using steel from similar places.

One thing to remember is that the empires at the time were very competitive and if Japan was fighting with one of the imperial powers, you can be damn well sure a rival imperial power is supplying Japan with the best equipment to fight back.

Both Europe and Japan had lots of different types of sword, ranging from short to long and light to heavy. You should compare like for like.

Both Europe and Japan used weapons both in warfare and ceremonially.