You can buy a sword reasonably suitable for heavy practice, both waza and tameshigiri, in the $1200 price range from either http://www.bugei.com
(Steel Iaito series 6006 and 7007)
They won't be made in Japan. The blades in that price range from both sources are made in China, although they are made in a reasonably traditional fashion. Many serious koryu practitioners around the US use these blades on a regular basis.
Purchasing steel from Japan will almost certainly set you back a minimum of $4000 and really more like $5000. They are truly nice and beautiful weapons, but they are not the only source of decent training weapons.