An explosion at a recycling factory close to Tokyo late Friday afternoon killed two people and injured 16, according to Japanese media.

"We heard a loud blast, then the house shook. At first we thought there had been an earthquake," said an elderly lady who lived near the site.

"In no time at all the house was turned upside down," said a cousin.

"We offer all our apologies," said a statement by Everclean, which manages the oil recycling site in Chiba prefecture where the blast occurred.

The explosion was felt for kilometres around the site and was followed by a fire, according to witnesses and images shown on Japanese television.

The exact cause of the explosion was unknown.