It will help everyone if you can pull the country out of the liquidity trap.
You are not explaining crap.
Japan is facing the same problems we are. An aging population on a fixed income, jobs gone to china, wage stagnation, and your answer is inflation?
How is inflation going to bring jobs back to japan, or the US?
What he is talking about that Japan is in a situation where their central bank no longer has effective mechanisms to influence the pace of the economy through monetary policy. In normal times the central bank can move % rates up and down to tamp down inflation, or accelerate the economy. That lever is broken in Japan. % are near 0, and there is no effect on econ accel, and there is no inflation penalty. This is known as a liquidity trap.
There is a calculation you can do to estimate "ideal" % rate. Doing this in an liq. trap yeilds a negative number, which is nonsensical.They need to do something else to move the needle.
Lack of inflation/deflation is bad as it is a disincentive to investment. THIS is what you are trying to improve and get the econ going. Its not the pensioners you need to focus on, its businesses and capital investment & hiring.
If just sitting on a pile of cash is more profitable than taking investment risks and hiring, that's what will happen. This doesn't create jobs.
Also, deflation is bad for nearly everyone. For consumers, why buy today when it will be cheaper tomorrow? So you don't. No buying, no jobs.
If I invest/buy in something and take on debt, the value of the remaining debt only increases over time. Think about your house, you take out a mortgage based on 25% of your income in monthly payments. Say value of income is fixed, in 10 years, that payment will rise to 33% of your income. Do you still want to buy/invest? No.
They need to raise longterm inflation expectations. Make businesses and people want to buy/invest today as it will only get more expensive in the future and your cash buys less.
Then it makes business sense to buy equipment, houses, factories, cars, eg
create demand. Demand is what creates jobs.
And yes, worrying about the poor bond holders in not in the best interest of Japan. The debt/gdp is high ~250%, but the % rates are insanely low, less than 1%. Its fine, there will not be a loss of confidence/run on bonds anytime soon. What will kill them is deflation and a shrinking economy.
They need a mix of growth and inflation to get them out of the trap they are in.