Tokyo, already under its fourth state of emergency since the pandemic began, announced 3,300 new daily cases, after a record 3,865 on Thursday.
The state of emergency will now include three more areas near the capital and the western prefecture of Osaka.
Prime Minister Yoshihide Suga told a news conference the virus is spreading at an unprecedented speed largely because of Delta variant, adding he is worried the country’s hospital beds could become stretched.
“With a heavy heart, I want to ask everyone: until we see the impact of more vaccinations, I want you all to stay vigilant and implement infection prevention measures to the full,” he said, calling on people to watch the Olympics on TV at home.
Already, 64% of Tokyo’s hospital beds available for serious COVID-19 cases are filled as of mid-week.
The new emergency measures mean more than a half of the country now lives under some restrictions.
Health Minister Norihisa Tamura said the country had entered a new “extremely frightening” stage as cases are spiking even though the movement of people was not increasing.
Japan has imposed a series of “state of emergency” declarations, but the orders are mostly voluntary, unlike other countries which impose strict lockdowns.
Yet many people have grown weary of stay-home requests, with some bars refusing to adhere to service restrictions.
Suga and Olympics organisers have denied there is any link between the games and the recent sharp spike in cases.
Unlike the voluntary restrictions and low vaccination rates elsewhere in Japan, the Olympic village in Tokyo for athletes and coaches boasts more than 80% vaccination, testing is compulsory and movement is stringently curtailed.
Athletes and other attendees from around the world must follow strict rules to prevent any spread of the virus within the “Olympic bubble” or to the wider city. Spectators are banned from most venues.
Organisers on Friday reported 27 new Games-related COVID-19 cases including three athletes, bringing the total since July 1 to 220.
But experts worry holding the Games has sent a confusing message to the public about the need to limit activities when less than 30% of residents of Japan are fully vaccinated.