Airlines and rail operators cancelled some services for the coming days as the typhoon, categorised as "very strong", barrelled towards the main southwestern island of Kyushu with gusts of up to 252km/h.
The meteorological agency issued an emergency warning saying the typhoon could bring flooding, landslides and wind strong enough to knock down some houses.
"Maximum caution is required given that forecasts are for strong winds, high waves and high tides that have not been seen thus far," Satoshi Sugimoto, the agency's chief forecaster, told a news conference.
After striking Kyushu over the next few days the storm is expected to approach central and eastern regions, including the capital Tokyo, around the weekend, the agency said.
Authorities issued evacuation orders for more than 800,000 residents in Kagoshima prefecture in southern Kyushu and central Japan's Aichi and Shizuoka prefectures.
In Aichi, home to Toyota's headquarters, two people believed to be residents of a house that collapsed in a landslide during heavy rains were unaccounted for. Three residents of the house had been pulled out, according to public broadcaster NHK.
Toyota will suspend operations at all 14 of its plants in Japan from Wednesday evening through Thursday morning, it said. Nissan said it would suspend operations at its Kyushu plant on Thursday and Friday morning, while Honda will also temporarily close its factory in Kumamoto in southwestern Kyushu.
Shanshan is the latest harsh weather system to hit Japan following last week's Typhoon Ampil, which also led to blackouts and evacuations.
ANA Holdings said it would cancel more than 210 domestic flights in total between Wednesday and Friday slated to leave or arrive in southwestern Japan, affecting about 18,400 passengers.
Japan Airlines said it would cancel 170 domestic flights through Thursday. A total of 10 international flights operated by both airlines will also be suspended.
