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About 10,000 runners will carry the torch across Japan's 47 prefectures, including far-flung islands, starting from the site of the 2011 quake and tsunami that killed about 20,000 people, highlighting the government's "Reconstruction Olympics" theme.
The first section will not have spectators, to prevent large crowds, and roadside onlookers elsewhere must wear masks and socially distance as Japan battles the deadly virus and scrambles to vaccinate its people.
"For the past year, as the entire world underwent a difficult period, the Olympic flame was kept alive quietly but powerfully," said Tokyo 2020 president Seiko Hashimoto at the opening ceremony.
"The small flame did not lose hope, and just like the cherry blossom buds that are ready to bloom, it was waiting for this day," Hashimoto said.
Casting a pall over the celebrations, North Korea on Thursday launched at least two projectiles suspected to be ballistic missiles, the first such test reported since US President Joe Biden took office in January.
Japanese Prime Minister Yoshihide Suga assured reporters in Tokyo the government was cooperating with the Tokyo metropolitan government and the International Olympic Committee to host a secure Summer Games.
"We will do our utmost in terms of coronavirus measures and continue to work with related areas to contain the spread of infections and hope to work towards a safe and secure Games," Suga said.
The starting ceremony started at J-Village in Fukushima, a sports complex converted into a staging ground for workers decommissioning the crippled nuclear power plant that caused tens of thousands to flee.
Members of the Japanese national women's soccer team will use the Olympic flame, flown in from Greece last year, to light the torch.
The relay, which will culminate with the Olympic opening ceremony on July 23, has been hit by several high-profile runner cancellations as celebrities and top-level athletes have pulled out, citing late notice and worries over the pandemic.
The opening ceremony - originally planned for thousands of fans as a celebration of Japan's recovery - is closed to the public. It featured a drum concert and dance performances by a group of residents from Fukushima, followed by a children's choir.
Japan has fared better than most countries during the pandemic, with fewer than 9,000 coronavirus deaths. But a third wave of infections has pushed the numbers to record highs, triggering a state of emergency in Tokyo and other areas that was lifted this week.
The majority of the public are against the Olympics being held as scheduled, polls show, and Japan is the slowest among advanced economies with its vaccination roll out.
At Fukushima, J-Village is decorated with local flowers arranged using Japan's traditional ikebana techniques. Japan has spent nearly $US300 billion ($NZ430 billion) to revive the disaster-hit region.
But many locals are apprehensive about the Games, as areas around the plant remain off-limits, worries about radiation linger and many who left have settled elsewhere. Decommissioning will take up to a century and cost billions of dollars.