So, going further with your rationale, we should have a sword named True Religion instead of Masamune, every instance of katana changed to sword, same with wakizashi and dagger. And, uhh, bed instead of futon, sauna instead of onsen (or heck, open sauna, amirite?) etc...
There's a game that tried to do that, it's called Persona. It's prime example of why extreme localisation is a bad thing.
If the story's supposed to play in Japan (heck, any
country in that area) then I'd have no problem with Masamune. But if there's no indication of that then a name from western mythology
(preferably expressing something like "True Religion") is definitely more appealing to me. Even if it's a clichÃ© like Excalibur.
In these cases, Japanese names detract from the setting IMO.