Tokyo Metropolitan Government officials confirmed a record-high 367 coronavirus infections on Thursday.
To try to stop the virus from spreading the governor is calling on residents to refrain from going out and drinking in groups.
Tokyo Governor Koike Yuriko said, "We are facing a critical situation and are on the verge of an explosive increase of infections. We need to take measures to curb it."
The Tokyo government is asking restaurants, bars and karaoke parlors that serve alcohol to shorten their hours for most of next month. Establishments that only operate between 5 a.m. and 10 p.m. will be eligible for subsidies.
But some bar operators say the amount -- about 2,000 dollars -- isn't enough.
Kitamura Ryohei, a bar manager, said, "Rent is extremely high in Tokyo. I don't think the subsidy is enough to cover losses any establishment incurs."
Tokyo continues to be the biggest hot spot in Japan. The daily figure in the capital has been above 200 nine of the past ten days.
The Tokyo Medical Association says the number of people asking to be tested has exceeded capacity at some testing sites and is causing delays. NHK has learned the association is planning to increase the number of sites in Tokyo from around 300 to 1,400.
Across Japan more than 1,000 cases have been reported for two days in a row. The daily tally exceeded the threshold for the first time on Wednesday.
In total, more than 35,000 cases have been confirmed across the country. Over 1,000 people have died.