Television pictures showed clouds of black smoke billowing from the Nippon Steel and Sumitomo Metal facility in Tokai, with one broadcaster reporting 12 people had been hurt in the blast.
A spokesman at the Aichi prefectural police said the fire department had been alerted to a problem at the plant at 12:46 pm (0346 GMT).
"A fire broke out although we still don't know if there was an explosion yet. Several people seem to be injured," he said.
The apparent explosion came after a fire at the factory earlier this year.