...personal debt tends to be low, and despite wage stagnation, Japanese households are known to keep money in savings.

It's my understanding that Japan's high level of national debt arose largely in the wake of the "bubble economy" falling back down to earth almost 30 years ago now, and the government - which basically means the hilariously mis-named Liberal Democratic Party (they're actually Japan's mainstream conservative party) - enacting some pretty dubious fiscal policies in response.

That's a factor that, as you say, needs to be considered in assessing the performance of their system. The LDP is known for working hand-in-hand with Japan's big corporate entities, and not always to the benefit of the working person. They depict their fiscal policy decisions as being "for the greater good" of the nation...but what politician doesn't?