There is no solution needed. Populations go up and down, there is no need to for the arrow to always go up and to the right, particularly for overcrowded places like Japan and China. Japan with 50 million Japanese would be a much nicer place, just as China with 500 million Chinese would result in each of those people being happier. Let nature take its course.
'Let nature take its course' is such a naive take.
The reality is that Japan (and countries following a similar path) are strangling the younger generation by saddling them with generational debt. They become responsible for taking care of an older population, with no guarantee of their own future as their own ability to retire vanishes and income goes to zero. It should be no surprise that the older block also votes to protect itself, as politicians skew far older than the rest of the citizenry. The result of 'nature taking its course' is a complete collapse of the government. In the long term this is certainly a solution but not a particularly good one.
An argument could be made that a slow gradual decline would help ease these issues but you would need to convince people twice your age to willingly give up their benefits and things they worked for and were promised. What are the odds that you think that will work out?
The only reason a solution is needed is because a problem was created by promising old people a ton of benefits. To deliver those benefits or expected quality of life, the country has to allocate a greater and greater proportion of the country’s productivity to old people.
Obviously, this means less purchasing power for younger people, and they might not like that so much.
Imagine if in the best scenario Japan is going to stop borrowing. Reducing the population will drive debt ratio up. Good luck to the next generation, say thank you to your grandparents who borrowed from you.
