Typhoon Ampil was located east of Hachijojima island, about 300 kilometres (190 miles) south of Tokyo and packing gusts of up to 216 kph as it headed north, the Japan Meteorological Agency said.
The typhoon is not expected to make landfall, instead, moving along the coastline near the Tokyo region, home to around 40 million people, before heading back out into the Pacific.
Authorities warned of strong winds, very heavy rains and possible landslides, urging people to exercise extreme caution.
A total of 1,700 households in Tokyo's neighbouring prefectures were without power as of Friday morning due to the typhoon, according to the utility operator.
ANA cancelled 280 domestic flights affecting more than 60,000 passengers, while Japan Airlines scrapped 281 domestic and 38 international services, hitting 49,700 customers.
Major parts of Japan's network of bullet train services were also to be cancelled Friday -- including the busy section between Tokyo and the central city of Nagoya.
The typhoon comes as Japan marks the "obon" holiday week when millions return to their hometowns, and days after Tropical Storm Maria dumped record rains in parts of the north.
Typhoons in the region have been forming closer to coastlines, intensifying more rapidly and lasting longer over land due to climate change, according to a study released last month.
Researchers from universities in Singapore and the United States analysed more than 64,000 modelled historic and future storms from the 19th century through the end of the 21st century to come up with the findings.
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