I expect it's been fired, quite a bit. The Japanese weren't likely to let a rifle sit around unused. Early versions of these have chrome bores so they generally all look pretty good. As for exterior condition, not bad but fairly typical. The mum is defaced/ground, doesn't really matter that you can still see the outline. Matching numbers are a plus.
There is no way I would offer $400 for a rifle in that condition with a ground mum. That's a $200-$300 rifle where I live and one very similar is sitting on the rack at a local gun shop unsold for $299. I have seen similar condition rifles with mums for $300-$400 and rifles with dust covers and monopods for $400-$450.
Just to be clear, you know it's a type 38 carbine right? Not a regular 38 or 99?
I would say $350-425 based on gunbroker realized sales.
Союз нерушимый республик свободных Сплотила навеки Великая Русь. Да здравствует созданный волей народов Единый, могучий Советский Союз!