This is a real crisis. I don't see how they get out of it.
http://www.bloomberg.com/news/2012-01-24/japan-says-it-may-miss-its-debt-goal-even-with-tax-increases.html
The population is not in favor of the double-the-sales-tax by 2016 plan. And indeed, it will suppress consumption. But their fiscal problems are so severe that they must be dealt with. The only reason this has held up so long was because of their trade surplus. You can afford to run large fiscal deficits if they are mostly offset by trade surpluses.
They've got a few years before the Grim Debt Reaper gets around to them, but it doesn't seem like the global economy will help them, the 3/11 disaster has greatly increased their fiscal burden, they cannot really afford to pay for the renewable energy schemes either, and they can't afford to modernize their power networks.
Their demographics are awful, and companies can't handle the strong yen and will continue to move production offshore, so what's left? Anyway, most of the government debt is held internally, so defaulting on it is just another blow to the domestic economy.