Some institutions in Japan are required to only hold certain types of assets. Insurance companies fit into this category. They buy the govt bonds because it is one of the few choices they have to invest their funds.
According to the article, the government ask for money, banks buy it up, and the BOJ buys it off the banks with printed money... The banks sell it at a smaller profit.... I guess if so many institutions are forced to hold on to them, they'd want deflation.