A crisis in Japan is inevitable
A succession of weak governments looking to keep voters on side did not prepare the country for this outcome and an inevitable fiscal crisis looms as expenditure soars while tax revenues shrink.
A financial crisis is almost certainly in the cards for Japan, and it is just a question of timing. Unfortunately, the government may have fast forwarded that date.
The risk of actually stimulating inflation is that it will erode consumer spending power. That's certainly been the experience of the U.K. where the pound has been pushed lower on a tidal wave of QE leading to imported inflation. Higher inflation could lead to higher interest rates, notwithstanding the concerted bond buying efforts by the Bank of Japan. A rise in interest rates would add to the government's burdens.
The other problem is that when it becomes apparent that these stimulus efforts haven't worked — that will probably take a few years — Japan's debt pile will be even bigger. What will follow is another round of credit downgrades from the main credit rating agencies, a crisis of confidence in Japan's financial position possibly leaving the Bank of Japan as the only buyer of JGBs.
The Japanese government will eventually default on its debts and many of its social obligations. It's just a case of whether it does it via inflation or by ceasing to pay interest and by not redeeming some of its paper. The long-term outlook for JPY is therefore extremely bearish.