A gymnasium used in 1964 erupted in cheers at the 0500 local time (2000 GMT) announcement of Tokyo's win and people screamed and embraced, jumping up and down.
Some waved Japanese flags, others held banners that said "Let's celebrate Tokyo's victory". "Having the Olympics will give us a chance to show the world how hard we've fought to recover - and thank the world for their support," said Tomoko Tanaka, a 33-year-old housewife who had come to Komazawa Park for the night-long countdown events. Japanese Prime Minister Shinzo Abe had made an impassioned speech to International Olympic Committee members at the Buenos Aires vote.
Despite the Tokyo bid committee's prediction of a three trillion yen ($29.99 billion) economic boost and the creation of 150,000 jobs, public support was tepid for a long time.
Many said the country could ill afford the Games while thousands remained in temporary housing along a wide swathe of coastline devastated by the March 2011 tsunami. As recently as mid-2012, only 47 percent of people were in favour of hosting the Games. Support surged late on though, with one poll suggesting 92 percent were on board and looking forward to an economic boost and a chance to enhance Japan's standing in the eyes of the world.
Long seen as a frontrunner, Tokyo's chances were clouded by a series of revelations about the Fukushima nuclear plant, whose operator has been forced to reverse denials and admit that hundreds of tonnes of radioactive water are pouring into the Pacific Ocean each day. Radiation levels have also spiked.
Abe's government said last week it would spend almost half a billion dollars to try to fix the water crisis. Critics said the government's sudden embrace of the issue was aimed largely at winning the Olympic bid. "I think it'll be good if choosing Tokyo leads to a clear resolution of the Fukushima problem," Yumiko Okuda, 51, said after the decision was announced on Sunday. "The eyes of the world will be on Japan now so it will have to be dealt with thoroughly."
The victory is likely to give Abe a popularity boost and could potentially spur his signature pro-growth policies for the world's third-biggest economy, bringing real gains in terms of construction and tourism. The win could push up the Nikkei stock average by more than 10 percent in the short term to around 15,600, near this year's high, one analyst said. Stocks rose for a month after Japan was awarded the 1998 Nagano Winter Olympics.
(Reuters, edited by Mitch Phillips for SBS)