If they hadn't closed the borders why wouldn't they have just been exploited the same way as China? While the divergence between modern Japanese history and modern Chinese history is due to some subtle cultural factors, they still are essentially Eastern, and by that I mean essentially non-Western. Therefore I doubt Japan would have become some sort of military/imperial power in the 17th century.
Would they have modernized faster in non military areas? Probably, but not enough to dominate North Amerca, Siberia, or China. I don't really know what was going on with Austraila and New Zealand at the time, but I would doubt for any sort of dominance there.