Remember when the goverment of japan funded darling in the franxx

Apart from Japan's rampant, degenerative sexually repressed culture, the real culprit of their decaying birth rate is the other side of Japan's fucked up culture: the importance on work and how overworking their people is really bad for them.

Japan can't fuck because the Japanese are literally too busy with work to fuck. They're too busy to have sex, which I think ties along nicely with their sexual repression (but also the fact that they've been an isolated island nation), and as a result, don't reproduce. Even then, they would be way too busy with work to even raise a child properly.