It is the latest diplomatic point of friction as the two countries are embroiled in a stand-off triggered by Prime Minister Sanae Takaichi's suggestion Tokyo might intervene militarily if Beijing were to invade Taiwan.

China insisted Wednesday the case was "an isolated public security incident".

On Tuesday, Pudong district police said on social media they had received a report that a man "was injuring people with a fruit knife in a restaurant".

Police said the suspect, a 59-year-old surnamed Yang who was detained at the scene, had a history of mental illness.

Three people were taken to hospital, the statement said, with Japanese media later reporting two were Japanese.

Asked about the reports, the Japanese consulate in Shanghai confirmed two citizens had been hurt, adding they were receiving medical treatment.

"The Government of Japan has requested the Chinese government to... clarify the facts and provide a clear explanation... (and) ensure the safety and security of Japanese nationals," a spokesperson said in a statement.

Top government spokesperson Minoru Kihara later confirmed Tokyo's request, adding that a consular alert had been sent out to all Japanese residents in China.

"The government will continue, while maintaining contact with the parties concerned, to provide all possible support from the standpoint of protecting Japanese nationals," he said.

China's foreign ministry said Wednesday that the third person injured was Chinese.

"This incident is an isolated public security case, and the competent Chinese authorities will handle it in accordance with the law," spokesman Guo Jiakun told a regular press briefing.

The restaurant reported to be the site of the attack, matching the police statement's rough address, appeared calm on Wednesday.

An AFP reporter saw multiple people in grey suits, who appeared to be security, standing guard in the mall it is located in.

Police said that when Yang was detained, he had been "speaking incoherently and behaving erratically".