Tokyo reported 920 new coronavirus cases, the highest since mid-May, two weeks before the Olympics.
Prime Minister Yoshihide Suga held a meeting with key ministers to discuss measures to control the spread.
Suga vowed “to do everything we can to prevent the further spread of the infection,” adding that he would make a final decision on reinstating emergency after consulting with a panel of experts on Thursday
A state of emergency in Tokyo just before the Games on July 23 would mean Olympic officials abandon plans to have spectators at venues.
Dr Shigeru Omi, a top government medical advisor, urged the authorities to quickly take tough measures ahead of the Olympics and summer vacation when many people tend to be more active. “The period from July to September is the most critical time for Japan's COVID-19 measures,” he said.