Permanent residency is about who can stay without having to worry about visas, while visas are about who is allowed to enter in the first place. Foreigners will still be in Japan, the only thing changing is that they'll be even more tied to a black company than before.
The mental model most immigration-naive people have regarding immigration is that the vast majority of "desirable" immigrants go to a country to get a job, work for some years, and then maybe they get something called a "green card" (permanent residency) or something. The reality is that most employers can't legally hire immigrants, unless they go through a LOT of hoops, which is not worth it. So a handful of employers specialize in this, and because they spend money to control this corner of the labor market, the labor of the immigrants trades at a discount relative to citizen labor. This is literally the opposite of what the system's stated intent is, immigrants are not supposed to undercut citizens, but nobody with power cares about that. So legal immigration is effectively an indentured servitude scheme where you work the bottom tier of a job for some number of years until you can get permanent residency.
What Japan is doing is, effectively, making the time you have to spend to get that reward a lot longer, and also disqualifying anyone less than 30 years away from retirement age unless they're rich enough to make up the shortfall[1]. This is primarily about empowering sweatshops (black companies) over imported workers.
You think it's about preserving Japanese culture, but I, being a huge fucking weeb, know for a fact that nobody calling for this gives a shit about Japanese culture. Especially not the Japanese politicians. The kinds of cultural things most foreigners value are things Japan has been trying to throw away since the Meiji Restoration; while the kinds of things Japan's elite value are byproducts of having a rigidly ossified social structure that cannot absorb any amount of change.
Like, for example... anime and manga? Foreigners like it. Otaku[0] like it. But Japan spent a decade trying to vilify otaku as mass murderers in training, and the people creating anime and manga haven't had much social prestige until recently. Hell, they still don't get paid very well.
The famed Japanese politeness is downstream of social oppression. They are polite for exactly the same reason American Southerners are polite; a combination of elites imposing their values on the populace and the populace adopting social defense mechanisms against the elite.
There is a narrative being pushed by ultra-rich elites. Think about how Mark Zuckerberg shifted from "we need to bring in insane numbers of H-1Bs to cover a labor shortage gap" to giving Trump shittons of money. Or how Elon Musk keeps talking about how we need as many women pregnant as possible. Or just the insane hardon that businesses have for robots and AI now. These all come from the same desire to keep wages down by creating a permanent underclass.
The underlying problem with the labor shortage gap, both in Japan and elsewhere, is that you can't afford to have kids in the middle of a wage stagnation and cost-of-living crisis. Japan has been in this crisis for so long that their population is decreasing, but every other rich country is not far behind. The root cause is that businesses cost-optimized people's welfare out of the economy, and they need people to be a renewable resource.
There are a few ways to fix the problem, but closing countries off to immigration is not one of them. Actually, if you wanted to break the hold sweatshops have on immigrant labor, you'd want to open the fucking floodgates and let the market close out the labor arbitrage opportunity we've been keeping open ever since the WTO made free global trade a thing. If the globalists are allowed to move goods through 20 countries to hyper-optimize their labor spend, then I should be allowed to move to whatever country has the highest wage for my given specialty to counteract that behavior. The problem is that this solution has transitional effects that would be unacceptable to the masses of people whose primary form of social power is the fact that they have a red and gold passport and the guy at the counter of the local Lawsons does not and never will.
[0] There is a minor difference in the meaning of the word "otaku" between Japanese and English. In Japanese, it just means "nerd" and you can be an otaku of anything. The meaning imported into English was specifically "anime-and-manga otaku".
[1] I'm also told by the AI midwit I had critique this comment that black companies commonly fuck up your pension payments, which would also make you have a shortfall.