just the facts, page-10

There is sovereign debt and sovereign debt.

Japanese bonds are largely held by Japanese. Japan is a thrifty society and saves a lot of money. Their saving institutions invest these savings in Japanese Government bonds. So Japanese do not have to go to other countries to sell their bonds and expose themselves to vagaries of international financial markets. In fact Japan is holding large foreign reserves such as bonds of other countries mainly US and other Western economies. It does not cover all what they owe to Japanese people but it creates a nice fat buffer.

I would go as far as saying we would see US default before Japan does.

US are in fortunate position that even when they owe money left right and center, and have huge sovereign debt covered by nothing, their currency is seen as world reserve currency and their bond as a sort of safe haven.
This is totally undeserved and great risk to the world IMO, but that is the way it is and nothing much can be done about it, at least in the near term.

Now sovereign debt of countries such as Greece is totally different matter. Greeks have no savings to speak of and Greek government was selling their bonds on the international market. Many European banks bought these bonds because the interest rates offered were higher that say German bonds. But if Greece were to default on their bonds, many European banks could go bust as well. That is the main reason rest of the EU came with the rescue package
for the time being. The real solution will be that Greece and other countries in trouble will be repaying their bonds with a discount maybe 80c in the dollar or something similar. But that will be in future when things settle down a bit, doing it now would spook the financial markets too much. I bet most of the banks are already putting money aside to handle this situation.

I am not worried about Japan just yet, as I posted earlier on this thread. But aging population in Japan will be withdrawing their savings in future and Japan will need to be ready for that.

My view and hope is that the younger generations of Japanese are and will be more like us, living for the moment and not save as much, thus helping by their spending their economy of the lows of last decades.