Coronavirus infections are surging at an unprecedented pace as new cases hit record highs in Tokyo, overshadowing the July 23-August 8 Olympics and fuelling doubts over Prime Minister Yasuhide Suga's handling of the pandemic.

Tokyo reported a record 4166 new cases on Wednesday while nationwide new cases topped 14,000.

"New infections are rising at an unprecedentedly fast pace," Economy Minister Yasutoshi Nishimura told a panel of experts at which he made the new proposal.

The panel was expected to confirm the new steps on Thursday before official government approval.

"The situation on the ground (at hospitals) is extremely severe," Nishimura said, noting clusters of infections were emerging at department stores, barber and beauty shops, and cram schools, unlike in previous waves of the pandemic.

Six prefectures including Olympic host city Tokyo are already under full states of emergency through to August 31 while another five are under less strict "quasi-emergency" directives.

The latest proposed steps mean that more than 70 per cent of the population will be under some restrictions.

But experts question whether the steps will have much impact as the highly transmissible Delta variant spreads and people have grown weary of staying home.

The proposed expansion follows a sharp backlash against Suga's plan to limit hospitalisation of COVID-19 patients to those who are seriously ill and those at risk of becoming so, while others isolate at home.

The shift is intended to address a hospital bed crunch, but critics say it will lead to an increase in deaths.

In response to calls to reverse the policy, Suga told reporters on Wednesday the change was aimed at regions with a surge in COVID-19 cases, such as Tokyo, and was not nationally uniform.

Australian Associated Press