There's a lot of reasons for this.
Some random reasons off the top of my head, from my daily experiences here:
1) low testosterone to start with
2) most young people are broke
3) young Japanese males are very feminine (herbivore male)
4) if you want to bang, and you don't have your own place, you've got to go to a "love hotel," which run $50-$100 for one night.
5) a HUGE percentage (double digits) of young girls do what's called "paid dating," where they go with older guys for money.
6) Many of the over 30 guys that I know, even the married dudes with family, are about as horn doggy as you can get, but they only use pros. Every time they travel to another city on business, it's game on.
7) Demographic shift, which happens in ALL post industrial countries, (lower marriage rate, rates of reproduction, etc), is a bit more accelerated in Japan and has been for a long while. As is Japan's economic collapse. This isn't anything new.
8) I don't see that young folks here are uninterested in sex, girls are still easy to game, and they still ARE game, but most young guys here HAVE no game.
9) The sex industry here is as thriving as ever, and even in small towns there's plenty of "pink salons." I live in a city of 500,000 and there's at least a hundred shops dedicated to some kind of sex (hostess clubs, snack clubs, outright BJ bars, underground brothels, etc)
10) there's really not much of the stereotypical "career woman," here as in the west, and many of the ladies who quit after having their first kid do it because they want to, not because they have to. For young Japanese girls, there' still a majority that want to be housewives, and are pissed when they end up having to work for a living. (Unless they're gunning for traditional female jobs like stewardesses or something)
In summary, I don't think "uninterested" is the right word to use. If guys had willing females handy (that they weren't terrified of talking to), and some money to spend, they'd be plenty interested.
Men are NOT consciously choosing to NOT have sex, meaning they aren't GIVING UP any clear opportunities.
They (young men) just pretty much suck at it, and they got no money, and no economic future.
But they certainly wouldn't turn down sex if it was offered to them.
It always cracks me up with MGTOW movement types will point to Japanese "herbivore males" as some kind of leading example.
These guys are DESPERATE for sex, money, etc. They just don't know how to get it.