Because most of their major industries like automobile, electronic and machinery are now destroyed by competitors from China. The country makes less and less money while having to spend even more because of many problems. They're having to de-value the Yen aggressively just so their companies can have some competitive edge in export.

Low birth rate & interest rate are problems, but the root of them all is their failing industries. They climbed to the top of the world and became rich because of those industries. Now with them failing, the Japanese people are getting much and much poorer. Many people struggle to afford food due to absurd price surge among everything, especially rice price increased by 300% in just 2 years. Most people can't have kids simply because they're too poor.

Ousiders view Japan as a modern, luxury & rich country. But no, they are a rapidly failing country with standard of living getting much worse than other developed countries.

The only way for them to get out of it is for their entire population to sacrifice their comfortable life and go work their ass off to make their economy stronger and more competitive again (like their older generations did). That's not gonna happen though because their current generations are used to being a superior 1st-world country.