Hi, I had the very same problem and it started when I was on travel and started using any charger I could get my hands on. My Nexus 4 lost the navigation buttons and I almost decided to replace it. I tried some software workarounds to us floating buttons but it wasn't very comfortable.
Later on I started getting ghost touches right above the navigation buttons (I had enabled the "Show touches" and so was able to see the location where ghosts were touching). I read through a lot of forums to see what could possibly be the solution. Even tried rooting, custom roms etc... The problem used to disappear for a while and always came back in a couple of days.
There were a few posts claiming that the battery and charger were the reasons. This made me curious considering the timing of my travel and my phones performance. So I started using an OEM charger (Actually my old Sony Ericsson's charger) and the ghost touch disappeared. It wasn't an over night incidence. The first time I used the charger from 0% to 100% the ghost touch reduced, the second time it reduced even more, and so on until by the end of the week the ghost touch completely disappeared and now after 2 weeks my navigation buttons started working. Now I can see my touches registering in the complete screen without any dead band over the navigation buttons.
Super psyched about having my awesome phone back.
Hope it works for others who read this too.