This is what I've heard from my friends living in Japan – people are sick, but the government is refusing to test them because they want to keep the numbers down so the Olympics don't get cancelled.
But other threads further up pointed out that even with massive under-testing, it should be hard to cover up a COVID-19 outbreak if it spread exponentially as expected – there would be reports of hospitals being overloaded and having to turn away people with severe symptoms, so maybe something else is going on.
I'm sure PM Abe is sweating bullets. Japan has been in an economic slump for decades. The Olympics and associated tourism was supposed to fix that (and Japan has seen a big increase in tourists in recent years as they gear up). And now this?
If the government has such strict criteria for testing, might it also not have implemented strict 'stages' that you must proceed through after a diagnosis? And a further, stricter criteria before even allowing hospitalisation?
My other suspicion is severe cases will try their best to hold off on self-reporting given the strict government testing criteria and lack of awareness/panic.
This is one key way that Japanese and US society diverge - Americans are much less afraid to 'make a fool of themselves' if they believe they are correct/in danger. Japanese unfortunately, much more so and especially when given direct government directions.
That doesn't explain the difference in death rates. If Japan were turning away severe life-threatening cases (especially despite plenty of hospital capacity), you'd expect an increase in deaths and rioting in the streets – at the very least, _some_ indication that something was wrong.
And if they _weren't_ turning away life-threatening cases, you'd expect reports of hospitals stretched far beyond capacity.
There really aren't any other plausible explanations than "Japan actually has significantly fewer or less severe COVID-19 cases than expected". It would have to be an implausibly massive cover-up.
But other threads further up pointed out that even with massive under-testing, it should be hard to cover up a COVID-19 outbreak if it spread exponentially as expected – there would be reports of hospitals being overloaded and having to turn away people with severe symptoms, so maybe something else is going on.