I think what he/she is saying is the following:
By declining the rental car company's CDW, the worst case scenario in terms of your liability to the rental car company is that you'd be on the hook for 50k deductible for your vehicle's damage, 50k deductible for the 3rd party vehicle damage and 50k non-operation charge. All in yen. Japanese car rental is such that the actual coverage is already included in the rental. So even if you decline the CDW, you're only on the hook for those deductibles. And he/she is presumably saying that such sum is small potatoes to the rental car company and therefore they would not be insistent on asking for any proof of your own insurance.

Btw, I agree with you that you should always carry a proof of insurance when renting from an agency abroad (abroad as in outside of US, if you live in US with American CC that offers this type of coverage).