The Thunderbird forum for Japanese users could not help. I have decided to use the quasi solution I devised as preveously mentioned. To avoid the problem I just do not create any new folder in Japanese. This is not serious incovenience since W8 is now my main OS.

I have done a lot of experiments since and the following is very puzzling results:

1. On TBird on W7 I created a new account and the associated Profile folder is named NewProfile.
W8 was clean installed and on it TBird was installed(no other app installed). And the profile.ini was edited to point the
Result: The TBird on the W8 could not open the folder named in Japanese.
2. My relative has machine with the same motherboard, cpu and video card as my machine. English language version of W8 and W7 are installed and TBird profile is shared by TBird on both OS. He does not have the problem of opening folders named in Japanese.
I copied the NewProfile to his machine and tried by using TBird on W8.
Result: The TBird on his W8 could open the folder in Japanese.

The above second result was what was expected because he was not having the same problem as mine but I just wanted to check by using my TBird profile.

I wonder what could be a difference(s) of my machine from his machine that causes the problem.