The country has seen a sharp increase in coronavirus cases, and is recording more than 10,000 daily new infections nationwide. Tokyo had a record high of 4,058 on Saturday (July 31), exceeding 4,000 for the first time.
"We will secure the necessary beds for severely ill patients and those at risk of becoming so," Prime Minister Yoshihide Suga said on Monday evening after a government task force meeting.
Other patients will be asked to stay at home, and the government will ensure they can be hospitalised if their condition worsened, Suga said. Previous policy had focused on hospitalising a broader category of high-risk patients.
Japan on Monday expanded its state of emergency to include three prefectures near Tokyo and the western prefecture of Osaka. An existing emergency in Tokyo — its fourth since the pandemic began — and the southern island of Okinawa is now set to last through Aug 31.
The country has avoided a devastating outbreak of the virus, with about 932,000 total cases and just over 15,000 deaths as of Sunday.
But it is now struggling to contain the highly transmissible Delta variant even as the public grows weary of mostly voluntary limits on their activities and the vaccination rollout lags, especially among younger residents.
Just under 30 per cent of the population is fully vaccinated.
Nearly 70 per cent of hospital beds for seriously ill Covid-19 patients were filled as of Sunday, city data showed.
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