BACKGROUND: Coronavirus disease 2019 (COVID-19) has disproportionately affected the most vulnerable populations. We assessed the prevalence and disparities of economic hardships and their impact on health deterioration in Japan. METHODS: Data were obtained from a nation-wide, cross-sectional, internet-based, self-reported survey conducted during August-September, 2020 with individuals aged 15-79 years in Japan (n = 25,482). Economic hardships and changes in various physical and mental health status were measured using sample-weighted data. Adjusted prevalence ratios (APRs) were estimated to investigate the associations between economic hardships and health outcomes. RESULTS: During April-September, 2020 in Japan, 25.0%, 9.6%, 7.9%, and 3.1% of the respondents experienced income loss, money shortage, financial anxiety and financial exploitation, respectively, with higher prevalence among workers (vs non-workers). Stratifying by sex and working status, income loss was associated with physical health deterioration (APRs ranged from 1.45-1.95), mental health deterioration (APRs ranged from 1.47-1.68), and having serious psychological distress (APRs ranged from 1.41-2.01) across all strata. Shortage of money and financial anxiety were also associated with increased likelihood of all adverse health outcomes assessed, regardless of whether the hardships were pre-existing or experienced first time. Among non-working individuals, financial exploitation was associated with physical health deterioration among males (APR 1.88) and mental health deterioration among both males (APR 1.80) and females (APR 2.23), while such associations were not observed among working individuals. CONCLUSIONS: During the early phase of the COVID-19 epidemic, COVID-19-related economic hardships were associated with physical and mental health deterioration in Japan, particularly among the vulnerable populations. Timely and prompt responses are warranted to mitigate both economic and health burdens.