Health experts now believe the virus spread quickly after two high schools from the cities of Kobe and Osaka competed in a volleyball tournament, with some players and coaches feeling feverish after the games.
"To all the high school and junior high school students out there, I beg you, as governor of Osaka, that just because school is off, please refrain from leaving your
homes," Toru Hashimoto, the governor of Osaka, said at a news conference after announcing the closure of the schools.
Kobe and Osaka are the most populated urban centres in Japan after Tokyo and a sense of panic at the rapid rise in the number of flu cases was evident as millions of morning commuters wore facemasks to work on Monday.
Many pharmacies in the area have run out of stocks of masks.
No H1N1 cases have yet been reported in inner Tokyo, which with almost 36 million people is the world's most populous urban area.
On Monday following a crisis meeting with cabinet ministers, Taro Aso the Japanese prime minister urged the public to stay calm, stressing that most people recover quickly from the virus.
"Caution is needed because there are cases of patients with chronic diseases such as diabetes whose condition is serious," Aso said.
"At the moment, however, many people are recovering smoothly after receiving appropriate treatment early."
Japan's first confirmed cases of the new flu strain, initially known as "swine flu", involved four people who tested positive after they flew in from North America earlier this month.
They were immediately quarantined along with about 50 fellow passengers.
According to the World Health Organisation about 8,000 people in more than 35 countries have been confirmed as having contracted the new H1N1 virus.
In Mexico, where the new flu strain first emerged, some 60 people have died of the virus.