Japanese Deflation

Reading the WSJ article on deflation linked below, I had to wonder:

But Japan's experience has looked nothing like this. Rather than being deep, destructive and concentrated in a few years, deflation has been a surprisingly mild, drawn-out affair. Consumer prices have been falling in Japan for 15 years, but never by more than 2% in any single year. Japan's deflation has been a morass, but not the destructive downward spiral many economists predicted. Why? And what does it portend for the rest of the world today?

The Japanese economy is basically stable, with a shrinking, aging population, and a tradition of continuous improvement in manufacturing that is world-famous. Why wouldn't prices keep going down in this situation? Consumer demand should be shrinking as the population shrinks, and the price of manufacturing just about anything should be going down as well. Is this too obvious?