gunmajet.net

Uhhh... You're asking for a lot for that price dude. When I was up in Gifu prefecture a good quality version of what you're asking for would cost in the range of $800 - 900 at least, and they make the things there. Display versions obviously less, but you said you want one that functions. On that note, you'd probably have to find a practitioner who's moving up to a real sword, or giving up on Iaido to get one for that price. I wish you luck.

And no, I don't practice, I just got bored one day at work and decided to do a bunch of research on Iaito.

How's your ni-hongo level?
A good place to start is a local Kendo Dojo or other martial arts type venue. Perhaps a member can recommend a local who will custom make a blade for you. As your height and hand span are most likely not common 'sizes' this will ensure a correct 'fit'. This is also good as you can set a final price and he (the master) can work around that. The downside is 1. I'm unaware of a master swordsmith in Gunma. 2. Negotiations with limited Japanese (if that was your answer) can be a hassle.
If you are not concerned and would like a standard sword the internet is probably the best place now but search google and Ebay in Japanese. At least then you'll know what you're getting (photos) before any money changes hands. It all depends on how serious you are I guess.
A third option is a shop I know of in Akihabara, he has traditional, custom, and modern designs, but beware tourist prices afoot. If you wanna try that option I'll find the address for you.
Also the rules for possesing such items have no doubt changed with the new laws on knives. But check with your supervisor maybe, I actually don't know.
On a final note if you return home with it some countries are pretty strict with the importation of such items. In NZ (where I'm from) you run the risk of customs dulling the blade. I have to register with the police in advance. So if there is a spate of random sword attacks in my city, they know whose door to knock on I guess.
Good luck, let me know how you go.

To the best of my knowledge, Mogito are exempt from those laws because they're made from materials that can't be sharpened.

Thanks for the comments, guys; wasn't actually expecting anything.

Mogito are except from the laws barring blades in Japan; they are made of (relatively) soft aluminum-zinc alloys that are non-ferrous and cannot really be sharpened.

I realize that it's a very low price, and I'm also not expecting a lot at that price either. Wall-hangers are usually expensive because of the production that goes into make it look nice; mogito can be a lot cheaper when you don't care about getting something that looks amazing. The furnishings are what end up costing you, and I really don't care about those.

I could get a mogito that's what I want for 40000 yen or less very easily. The problem is that I don't want to spend 40000 yen on a mogito at the moment. 1250 USD is way, way too much to spend on a first mogito, especially when you'll probably cut up the saya doing noto or accidentally bash the blade on the floor, bending it.

As far as heirloom swords taken by GIs after the war, you can't bring those into Japan unless they're papered, in which case it was probably illegal to take them OUT of Japan to begin with. They're not only ferrous metal, but they're sharp. The pressed/machined swords issued to the military in WWII were all melted down and are not allowed into the country; the traditionally-made ones are national treasures and can be subject to confiscation if they're unpapered.

I don't need a custom-made sword. My height and hands are pretty average for a Japanese guy. A custom-made sword at my level is just throwing money into a bonfire. The vast majority of mogito sold in Japan are actually made in China, then shipped here and assembled in Japan under a variety of names/brands. The fittings are generally Japanese and the assembly allows companies to say "made in Japan". They're cheap, legal, and there's nothing wrong with them. Granted, a custom-made sword will be nicer, but it will also be a lot more expensive. I'm really not looking for a shinken either, just a mogito.

My sensei is also the one who suggested the 25000 yen price for a used mogito, so I suspect it's entirely doable. Most likely not here, but I figured I'd ask on the random off-chance that someone tried iaido and decided it wasn't for them.

Sorry for the long post, and thanks again for the comments.