We have a tendency to give undue importance to demographics. The current world champions have a population of 45 million, while India and China, with a combined population of 2,800 million failed to even qualify for the FIFA World Cup. In football, it is quality that matters and not the quantity. There are countries such as United States and Saudi Arabia, which are populous as well as rich. But these countries are not considered as superpowers in football. Once again, it proves that population and money can help only up to a certain extent.
Japan has remained as one of the most rapidly ageing countries for the last 2-3 decades. Only very recently the birth rate in some of the other countries (such as South Korea and Taiwan) went down below the level of Japan. All that said, Japan is still a country with 125 million people (3x the population of Argentina). So why the Japanese team is so weak. One reason maybe that the local league is not that strong. But then Argentina also doesn't have a very good local league. Most of their players depend on the UEFA leagues, such as EPL, Serie A, La Liga and Ligue 1.