At least 18,000 local residents have been evacuated from the area, and more than 3,000 soldiers and several naval vessels and helicopters are on standby to help with further evacuations.
The snow-capped volcano erupted earlier in the day, sending a huge column of grey smoke, gas and hot rock billowing high into the air.
At least 18,000 local residents have been evacuated from the area, and more than 3,000 soldiers and several naval vessels and helicopters are on standby to help with further evacuations.
Correspondents say the most immediate danger is posed by melting snow, which is thought to be forming a large reservoir of mud.
Further eruptions could set off giant mud slides down the side of the mountain.
"Depending on developments, the eruption could cause even bigger damage," said Prime Minister Keizo Obuchi, who called an emergency cabinet meeting to discuss the situation.
"The government will do whatever it can to deal with the situation," he said.
Ash cloud
Experts said another big explosion was unlikely, but noted it could take time until the volcano settled.
"The fact that the ash cloud rose so high suggests the force of the eruption was strong," said Yoshiaki Ida, chairman of the government's volcano experts panel.
"There is no 100% guarantee that a bigger explosion and ash flows will not occur, so we should keep this in mind," Ida said.
More than 10,000 people had already been escorted from the immediate area after government warnings that the volcano was about to erupt.
They are now being housed in schools and public halls.
The eruption came just hours after roads began cracking from growing fissures on the flanks of the snow-capped mountain, early signs of the magma swelling below the earth.
Roads closed
Police closed roads with a 10km (six mile) radius of the volcano.
Many residents rushed into the streets to watch the eruption as it began early on Friday afternoon, clearly visible from the surrounding countryside.
Initial reports from military helicopters said the eruption occurred near the crater rim.
There is also concern that a flow of debris into a lake on the western side of the mountain could create a wave similar to tsunami created in the oceans by major earthquakes.
The 732-metre (2,416-foot) Mount Usu is located 770km (475 miles) north of Tokyo.
Roughly 51,000 people live in three towns around its base.
Mount Usu's last eruption, in 1978, left two people dead and destroyed nearly 200 homes.
Mount Usu normally logs 20 to 30 tremors a month, but there have been more than 3,000 tremors since Sunday.