A 'short and powerful' state of emergency has been declared for Tokyo due to the on-going Covid-19 crisis, three months before the Olympic games are due to be held there.

The government has ordered restaurants, bars and karaoke parlours serving alcohol to close, and big sporting events to be held without spectators from 25 April to 11 May.

"We absolutely have to limit the movement of people, and we have to do it decisively. We need powerful, short and focused measures," Economy Minister Yasutoshi Nishimura said, asking people to remember the lockdowns of last spring and stay at home.

Prime Minister Yoshihide Suga said Japan would take measures to ensure it could safely hold the Olympics this summer.

The pandemic has sharpened focus on whether the Games can or should go ahead.

Earlier today Australia's diving team said it was "not safe" to travel to Japan as they withdrew from a test event due to start in May, while yesterday saw the first case of Covid-19 from the nationwide Olympic torch relay.

"It is feared that contagion in major cities will spread across the whole country if we take no measures," Suga said.

The state of emergency - a third round for Japan that also includes Kyoto and Hyogo - will cover nearly a quarter of the population and last through the looming "Golden Week" holidays, dealing another blow to the tourism and services industries.

Tokyo Governor Yuriko Koike said the government would ask for illuminations and neon signs to be turned off.

"It will be dark at night," she told a news conference, and asked non-residents to refrain from entering Tokyo if possible.

Japan has avoided an explosive spread of the pandemic experienced by many countries. There have been about 550,000 cases and 9,761 deaths, significantly lower numbers than in other large economies.

However the latest rise in infections has stoked alarm, with a surge in a mutant variant and a critical shortage of medical staff and hospital beds in some areas. Japan's vaccination drive remains sluggish.