TOKYO (REUTERS) - The Japanese government was preparing to set up a special headquarters on coronavirus as early as Thursday (March 26) afternoon, a step that could set the stage for declaring a state of emergency over the outbreak, Kyodo news agency reported, after the capital of Tokyo saw a sharp rise in cases this week.

The Japanese capital of Tokyo reported more than 40 new cases of coronavirus infections on Thursday for the second day running, Jiji News reported.

Tokyo Governor Yuriko Koike late on Wednesday held an emergency news conference to warn of the risk of an explosive rise in infections, asking residents to avoid non-essential outings until April 12. The city has become the centre of Japan's coronavirus epidemic, with more than 250 cases.

Under a law revised earlier in March to cover the coronavirus, the prime minister can declare a state of emergency if the disease poses a "grave danger" to lives and if its rapid spread threatens serious economic damage. The virus has already increased Japan's recession risk.

If a state of emergency is declared, governors in hard-hit regions would have to take steps such as asking people to stay home, closing schools and other public facilities and cancelling large events.