At the same time the Japanese are really hard working and there are some Japanese companies out there which are trying to change the norm and I do sincerely hope they succeed.
To the question if start-ups can grow in Japan I believe so yes. But not in the same way and context as in the west and in the silicon valley. The culture is just too different and as a result so will the start-ups.
I have met some really bright people here and I have also come across many social barriers and rules that don't make sense (to my way of thinking). For the sake of the Japanese economy I hope that the culture slowly but steadily becomes more accepting of start-ups and entrepreneurship and encourages these bright people to create instead of smothering them.