The top-level warning means a threat to life, as well as the risk of massive damage from torrential rains and gusts of up to 250 kilometres (155 miles) per hour.
The Japan Meteorological Agency issued the alert for Okinawa's main island, home to around 1.2 million people, as well as the outlying Miyako islands.
"We advised all 55,000 people in Miyako at 10:00 pm (1300 GMT yesterday) to evacuate to facilities such as community centres and municipal buildings," Miyako disaster official Katsuhiro Koja told AFP by telephone.
Waves could reach as high as 14 metres (45 feet), a weather agency official said in a warning that was likely to revive memories of Japan's quake-tsunami disaster in 2011.
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The typhoon, which was downgraded from super typhoon status as it approached the islands today, was some 300 kilometres (190 miles) south southwest of the Kadena Air Force Base in Okinawa at 6:00 am local time (2100 GMT yesterday), according to the US Navy's Joint Typhoon Warning Center.
"Record-level violent winds and high waves are posing a serious danger to the Miyako island region," Satoshi Ebihara, the Japanese weather agency's chief forecaster, told an evening news conference.
"People are advised to refrain from going outdoors... evacuate if necessary before violent winds occur and take appropriate action to protect themselves," he said.
The massive gusts and torrential rains will possibly reach mainland Japan by Wednesday, a weather agency official said yesterday.