I will try to put my two cents in, from a more psychological perspective.
Chinese is largely a semantics-based writing system. Phonetically transcribed loan words are relatively easy to coin, but difficult to comprehend, unless the reader also understands the language from which the words come. When a new concept is introduced into the language, it's easiest to just do a phonetic translation. Two words, from a century ago, come to mind readily: 德謨克拉西 (phonetic) vs. 民主 for democracy and 塞恩斯 (phonetic) vs. 科學 for science. When the two concepts are understood and accepted into the culture, then 民主 and 科學 are definitely much easier to comprehend by the average Chinese reader.
The best kind of translation is, of course, a term that captures the sound as well as the meaning. An example is 黑客 for hacker. Not only is the sound very similar to the original English word, the Chinese characters also evoke an image of some outsider lurking in the dark. Other notable examples of phonetic translation making their way into the language also involve clever choice of characters that evoke certain emotions or atmospheres. I am thinking of words like 浪漫 and 幽默. I am sure there are a lot of others, too.
I am no expert on the Japanese language, but I understand that loan words are written in katakana, a different set of symbols. In other words, the presence of the katakana already signifies to the reader that it is a loan word. So from a psychological point of view, it's easier for the reader, and perhaps this is one of the reasons for the relative ease of retaining phonetically transcribed loan words in Japanese.