China Friday warned millions of people living along its east coast to stay indoors and cancelled more than 100 flights in preparation for the most powerful typhoon in years.

Typhoon Muifa, which was packing winds of up to 162 kilometres per hour (100 miles per hour), is expected to make landfall on China's east coast on Saturday evening or on Sunday.

A weather official in Shanghai told local media the city had "basically ruled out" a direct hit, yet warned it might be close.

The typhoon would be the worst to affect China's commercial centre since 2005, when Typhoon Matsa killed seven people after making landfall nearby.

China Southern Airlines cancelled more than 140 flights to eastern China from Saturday afternoon while Shanghai-based China Eastern Airlines warned of a "severe impact" on services.

Shanghai warned bullet train services might be affected by the storm -- a sensitive issue after a deadly high-speed train crash two weeks ago that was initially blamed on weather conditions.

The official Xinhua news agency said China had called more than 7,000 fishing boats back to harbour and local governments were preparing for possible evacuation of residents.

Muifa lashed Japan's Okinawa island Friday, causing heavy rains, sparking flight cancellations and blackouts and leaving at least a dozen people with mostly light injuries.

China's National Meteorological Centre said the typhoon was forecast to make landfall in the eastern provinces of Zhejiang or Jiangsu, both of which neighbour Shanghai.

Strong winds, torrential rain and waves of up to 4.5 metres (15 feet) high were expected in coastal areas and up to 12 metres in the East China Sea.

However, the storm decreased in power on Wednesday night, going from a super typhoon to a severe typhoon.