Going down...

The fall in Japan's population is accelerating pretty much as expected:

Japan's population has entered full-scale decline and shrank by a record 183,000 people over the past year

Of course this is accompanied by a "greying" of the population and reduction in the workforce as a proportion of the total. One rational response might be to encourage immigration to make up the numbers, but in fact Japan has been kicking out foreigners at quite a rate recently. The reduction in non-Japanese population actually contributed 47,000 to the total decline. This is all part of the current trend towards isolationism. Perhaps they think they can replace workers with robots.

Meanwhile, the economy has recently been back in deflation, though not by enough to make up for the pay cuts.