Japan is sending its deputy foreign minister to Burma to investigate the death of a Japanese journalist, who was covering the anti-government protests.
Japan said it would review its aid programmes to Burma over the fatal shooting of Kenji Nagai on Thursday.
TV footage has emerged which raises the possibility that the 50-year-old may have been deliberately targeted rather than caught in police cross-fire.
Japan's PM, Yasuo Fukuda, said he would decide how to proceed after the visit.
"We will have to think carefully to figure out what is the best thing to do - what is the best choice for Japan."
By sending Mitoji Yabunaka to Burma, he said Japan would "find the way to solve this issue and to make further decisions. Sanctions are not the best step to take now."
He has described Mr Nagai's death as "really deplorable".
Kenji Nagai had experience of working in dangerous places
Japan is a leading aid donor to Burma and has been criticised for failing to take a tougher line against the regime.
Tokyo has withheld some aid from Burma since pro-democracy leader Aung San Suu Kyi was detained in 2003.
But it funds emergency and humanitarian projects on a case-by-case basis, and is one of the military regime's significant trading partners.
Mr Nagai, an experienced journalist who had worked in many dangerous parts of the world, was killed near the Sule pagoda, which has been a focal point for several of the demonstrations.
Monks and ordinary people have been protesting for days
Japanese TV has been running footage which appears to show a government soldier shooting the journalist at close range.
Mr Nagai, who was working for the Tokyo-based APF network, is seen falling to the ground still carrying his camera as a soldier points a rifle right in front of him.
Japanese embassy doctors have confirmed that he was killed by a bullet to the chest.
''Whether [the shooting] was intentional and whether it was from a point-blank range remains to be investigated," Chief Cabinet Secretary Nobutaka Machimura said.