Toyota Motor Corp chief executive Akio Toyoda and other executives will not attend the opening ceremony, Toyota said on Monday.
"It is true that Toyota will not be attending the opening ceremony, and the decision was made considering various factors including no spectators," a spokesperson said.
"We will not be airing any commercials related to the Games in Japan," she added.
Some 60 Japanese corporations who have paid more than $3 billion for sponsorship rights to the postponed 2020 Olympics now face a dilemma of whether or not to tie their brands to an event that has so far failed to win strong public backing.
With just four days before the opening ceremony in Tokyo, 68 percent of respondents in an Asahi newspaper poll expressed doubt about the ability of Olympic organisers to control coronavirus infections, with 55 percent saying they were opposed to the Games going ahead.
Three-quarters of the 1444 people in the telephone survey said they agreed with a decision to ban spectators from events.
As Covid-19 cases rise in Tokyo, which is under a fourth state of emergency, public concern has grown that hosting an event with tens of thousands of overseas athletes, officials and journalists could accelerate infection rates in Japan's capital and introduce variants that are more infectious or deadlier.
International Olympic Committee president Thomas Bach has said he hopes the Japanese public will warm to the Games once competition begins and as Japanese athletes begin winning medals. The Tokyo Olympics run from 23 July through until 8 August.
"We will continue to co-operate and work closely with organisers such as Tokyo Metropolitan Government, Tokyo 2020, and the IOC to ensure we have a safe and secure environment for the Games," government spokesperson, Chief Cabinet Secretary Katsunobu Kato said at a regular briefing.