Typhoon Bolaven was 300km (186 miles) north of Naha, Okinawa at 11:00 am local time (02:00 GMT), Japanese media reported.
In Seoul, President Lee Myung-bak has called for thorough preparations, Yonhap news agency said.
It could be the strongest storm to hit the area in a decade, the agency said.
However, it is expected to weaken to a Category 1 storm by Tuesday when it hits the Korean peninsula. Parts of China will also experience heavy rainfall and strong winds, a forecast report said.
Flights may resume About 75,000 households in Okinawa and the southern Japanese city of Kagoshima have been left without power after the typhoon struck on Sunday, Japanese media reported.
On Monday morning, flights to and from Naha airport remained cancelled.
"But if the weather permits, airlines may be able to resume flights in the afternoon," an airport official was reported as saying by AFP news agency.
Ships and ferries linking the island chain in the area were also cancelled.
At least four people were injured but reported wind speeds on Okinawa and nearby Amami were lower than forecast.
Japan's meteorological agency had estimated wind speeds near the storm's centre at around 180km/h (112 mph), with extremely strong gusts reaching 252 km/h.
But NHK reported early Monday morning that the strongest gusts measured on the islands - on Amami, north of Okinawa - reached just 140km/h, according to the AP news agency.
"The winds weren't as strong as expected. We're glad there's no major damage so far," crisis management official Yoshimitsu Matsusaki was quoted as saying by AP.
Trees 'bending' Hannah Bryan, who is visiting her sister in Okinawa from Britain, told the BBC that she and several others would try to weather the storm in her sister's house.
"We are planning on putting lots of duvets in the middle of the living room and staying together, away from the windows," she said
"It is really windy at the moment and it is getting stronger and stronger. The trees are bending outside."
British tourist Paul Graham, whose flight out of Okinawa had been cancelled, said the streets in Naha were deserted on Sunday.
"It is quite stormy at the moment, very windy and very wet. There is a canal nearby here, and there is concern about its levels in this weather," he told the BBC.
Typhoon Bolaven comes just after Typhoon Temblin, which has caused widespread damage in Taiwan.
The latest typhoon is the 15th destructive storm of the season in East Asia.