Japan will not send her warships to take part in a US-led naval force in the Gulf.
Washington claims that such a force to guard tankers in the Strait of Hormuz.
A Japanese official said that Tokyo fears a revengeful reaction from Iran if the Japanese war vessels were sent to the Gulf. However, Japan may dispatch planes to participate in patrols over the Gulf later.
Japan's Mainichi newspaper reported, quoting unnamed government sources.
The newspaper said Friday that Tokyo may still send warships independently to escort Japanese ships sailing in the world's most important oil transport hub.
When asked about the report, Japan's Chief Cabinet Secretary Yoshihidi Suga, he said: "We are watching the situation closely and continue to gather information, while working closely with the United States and other countries."
As its main ally in Asia and a major regional maritime power, Washington is keen to pull Japan to any coalition against Iran.
Japan ranks fourth among the world's largest oil buyer and plays a key role in the proposed naval force.
The Japanese government is likely to face domestic opposition against any military adventure that could jeopardize the Self-Defense Forces or threaten the lives of Japanese residents of Iran.
The Japanese army has not fought any war since World War II.
The United States has blamed Iran for a series of attacks on oil tankers near the Strait of Hormuz since mid-May, including a tanker operated by a Japanese shipping company.
Tehran denies those charges vehemently.
Last week, US Secretary of State Mike Pompeo called on Japan, Britain, France, Germany, South Korea, Australia and other countries to join a naval force guarding tankers in the Strait of Hormuz.