Japan yet again

Today's FT main article makes scary reading. According to the BoJs own calculations a 100bp rise in long term government bond yields would lead to mark to market losses of 20% of capital for regional banks and 10% of capital for major banks. Those are huge numbers, and JGB yields have already backed up 30-40bp since QE35 (or whatever the number is - I've lost count) started. 

Losses like that would totally hobble the financial system and create a huge credit crunch as banks simply stop lending to preserve capital. 

But as I pointed out earlier, JGBs have to be a sell. If the BoJ is set on creating inflation of 2% within 2 years then why would you hold on to a bond paying less than 1%?

And all the time the population continues to age and shrink, and there is no sign of a move to let immigrants in to at least try to arrest the demographic collapse.

Damned if they do, damned if they don't....

I hope I'm wrong but I just can't see how this ends well.