C. Rakesh,
Directing investment through the control of interest rates is not the same thing as Japanese banking, it seems to me. The article you responded to talked about the failure of the current a Tokyo government to control the size of the Japanese Ministry of Finance. This is the same ministry that has been continually accused of what amounts to collusion and insider trading in the interest rate markets. This is the same ministry that is an omnipresent force for nepotism and cronyism in the financial industry.
The problem is that the Japanese banking system, like all capitalist banking systems is far, far too closed to be considered anything like a ubiquitous source of investment capital. Before would-be users of investment capital even get to the question of interest rates they have to get to the money, a daunting prospect. While major firms borrow at a pittance above prime, money-center banks demand rates in the teens and personal property as collateral for lesser would-be debtors. That assumes they can get in the door. The Japanese banking system obviously has this same deformed character. Lenders lend to those who are "in" and fail to lend to the outs, without a consistent regard to the soundness of the loans and the underlying commercial enterprise. If credit was generally accessible one could do a great deal to control investment through interest rate regimes.
The first and absolutely foremost problem is that credit, even Japanese credit, is available to a capitalist clique rather than "the economy." Of course there is little economy without credit so "the economy" and the capitalist economy seem like the same thing. This is a central problem for Marxist economists, it seems to me. You are forced to posit models for which there is no investment capital.
peace