Their interest rate used to be <0%. To a first approximation that is worthless, there is almost no reason to buy Japanese government bonds. One Wiki page talking about 2013 [0] suggests that 70% of the bonds are purchased by the government itself and the remainder is mainly Japanese institutions that I would expect are legally compelled to (otherwise, why bother?).

I doubt the official Japanese interest rates are directly connected to the markets in a way that makes sense using traditional thinking. Most rational actors wouldn't be involved in a market where there is lots of downside and no real compensation. So the people involved aren't likely free to make rational decisions and all bets are off about what they do.

[0] https://en.wikipedia.org/wiki/National_debt_of_Japan

I just got 5.27% annualized on a 4 week US tbill while the Japanese 2 year is all the way up to 0.18% today.

Taking short term rates from negative to zero is just going to slow the bleeding a little. With these rate differentials this should be expected but it also might be a good place to long yen here but I am not a currency trader.

I guess there needs to be a balance between low value for driving exports and high value for making imports possible. Japan is an island nation, they need to import a lot of things to make their exports happen.