So many already listed here. Aside from YMO I think the other Japanese band that had the biggest impact and introduced me to a load of other music was Pizzicato Five. Their discography is huge and covers a wide range of styles. They were regarded as "alternative/indie" in the UK initially but that is in spirit rather than sound. Of course, like YMO, Pizzicato Five are linked to so many other great musicians.
Plastics are certainly in my top 3. Their followup band Melon after they moved to NYC was also really damn good - Bernie Worrell from P-Funk and Talking Heads played with them, as well as guys from the Lounge Lizards and Brand X.
More objectively, I'd probably vote YMO as "best" Japanese band. They were basically a supergroup and defined the future of Japanese pop music, both collectively and individually. I'm quite partial to the more new Romantic "Naughty Boys" album featuring the always great Bill Nelson on guitar but love all their stuff up til then too.
Also contending for a top 3 spot: Rosa Luxemburg. They run the gamut from wild spazzy punk to Beatlesque psychedelia like this track: Leader Dont's next band Bo Gumbos got much more famous domestically but they aren't nearly as good as Rosa imo.
Was literally about to mention that and post "Time Machine ni Onegai" but I can't find an album version on Youtube. One of my other faves. "Kurofune" is one of the great Japanese albums.
Not a band but the collaboration of Miki Nakatani and Ryuichi Sakamoto yielded great somgs. IMO they are the best works of Sakamoto.
Since this thread was basically an excuse to post some Jagatara, I'll post some more: Japanese never sounded as badass as when it's coming out of Edo Akemi's mouth imo. This is my go-to Japanese song I do every time I go to karaoke too.