Multiple injuries, but no immediate deaths, were reported from the Pacific coastal area of Miyagi on the main Honshu island, police said according to media, and TV footage showed widespread flooding in the area.
The quake hit in the early afternoon, also strongly shaking buildings in greater Tokyo, the world's largest urban area with 30 million people.
At least six fires were reported in Tokyo, where the subway system stopped, sirens wailed and people streamed out of buildings.
The first quake struck about 382 kilometres (237 miles) northeast of Tokyo, the US Geological Survey said, revising the magnitude from an earlier 7.9.
Japan, is located on the "Pacific Ring of Fire" and dotted with volcanoes, and Tokyo is situated in one of its most dangerous areas.
A tsunami warning was issued for Japan, Taiwan, Russia and the Mariana Islands, the Pacific Tsunami Warning Centre said.
"An earthquake of this size has the potential to generate a destructive tsunami that can strike coastlines near the epicentre within minutes and more distant coastlines within hours," the centre said in a statement.
It also put the territories of Guam, the Philippines, the Marshall Islands, Indonesia, Papua New Guinea, Nauru, Micronesia and Hawaii under a lower tsunami watch.
The yen fell to 83.30 against the dollar from 82.81 before the quake struck.
The mega-city of Tokyo sits on the intersection of three continental plates -- the Eurasian, Pacific and Philippine Sea plates -- which are slowly grinding against each other, building up enormous seismic pressure.
The government's Earthquake Research Committee warns of a 70 percent chance that a great, magnitude-eight quake will strike within the next 30 years in the Kanto plains, home to Tokyo's vast urban sprawl.
The last time a "Big One" hit Tokyo was in 1923, when the Great Kanto Earthquake claimed more than 140,000 lives, many of them in fires. In 1855, the Ansei Edo quake also devastated the city.
More recently, the 1995 Kobe earthquake killed more than 6,400 people.
More than 220,000 people were killed when a 9.1-magnitude quake hit off Indonesia in 2004, unleashing a massive tsunami that devastated coastlines in countries around the Indian Ocean as far away as Africa.
Small quakes are felt every day somewhere in Japan and people take part in regular drills at schools and workplaces to prepare for a calamity.
Nuclear power plants and bullet trains are designed to automatically shut down when the earth rumbles and many buildings have been quake-proofed with steel and ferro-concrete at great cost in recent decades.
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