Japan’s experience over the past 20 years provides solid support for those who believe that there is a causal link between demographics and deflation.
As societies such as Japan age, the large numbers of people approaching retirement tend to save more and consequently spend less on current consumption. The thinking is that this type of large-scale deferred consumption can lead to price decreases.
For anyone interested in exploring this issue further, David P. Goldman produces some very interesting content on the topic.