The Meteorological Agency is warning that Mount Kusatsushirane, located between Gunma and Nagano prefectures, could erupt on a small scale and has warned people not to approach the crater.
The agency raised the alert level to 2 from 1 on the scale of 5, and advised that large pieces of volcanic cinder could be scattered up to 1 km from the summit of the 2,160-meter mountain.
The warning was issued Tuesday after the agency's advisory panel on volcanic eruptions compiled a report indicating the mountain is showing signs of activity.
Panel Chairman Toshitsugu Fujii said there was "no sign" that the activity will lead to a huge eruption.
"Even if it erupts, it is likely to be on a small scale," he said.
The panel reported that volcanic seismic activity has been increasing since early March, while a change in magnetic force, likely to indicate rising temperatures underground, has also been observed.