More than 2,000 cases were recorded nationwide on Wednesday, with nearly 500 in the capital Tokyo alone.
While small compared to figures seen in some other countries, the numbers represent a sharp rise in cases for Japan, where testing is often less wide-scale than in other parts of the world.
“We are now in a situation of maximum alert,” Prime Minister Yoshihide Suga told reporters.
“I ask you, the Japanese people, to fully implement principles such as wearing masks,” Suga added, urging people to wear them even while talking during meals in restaurants.
National broadcaster NHK said Suga had asked expert advisers to meet on Thursday and Friday to examine the growing number of infections before the government takes any further measures.
Suga said he would support local regions if they asked businesses to close early, and that restrictions including limiting groups at restaurants to four people should be considered.
Tokyo is expected to raise its alert level to the highest of a four-tier scale on Thursday, but the move does not come with automatic restrictions.
Local media said the capital was not likely to request early business closures for now.
Japan has so far taken a comparatively relaxed approach to coronavirus restrictions, with even a nationwide state of emergency in the spring carrying no obligation for businesses to close or people to stay at home.
And while testing has ramped up, it has remained comparatively low, with around 5,000-6,000 people tested a day in metropolitan Tokyo, home to nearly 14 million people.
Still, Japan has seen a relatively small outbreak so far, with close to 121,000 recorded infections and just over 1,900 deaths since the virus was first detected in the country in January.