The show director of the Olympics opening ceremony has been dismissed, one day before the event is due to be held.
Footage of Kentaro Kobayashi from the 1990s recently emerged in which he appears to make jokes about the Holocaust.
Japan’s Olympic chief Seiko Hashimoto said the video ridiculed “painful facts of history”.
The dismissal is the latest in a string of scandals to hit the Games.
Since the start of the year, three other organisers have been forced to step down from Tokyo 2020 – and the games have already been postponed because of the Covid-19 pandemic.
This latest scandal has seen former comedian Mr Kobayashi strongly criticised for a sketch he performed 23 years ago, in which he and another comedian pretend to be children’s entertainers.
In the sketch Mr Kobayashi turns to his colleague, referring to some paper dolls, saying they are “the ones from that time you said ‘let’s play the Holocaust'”, according to AFP news agency.
Japanese Prime Minister Yoshihide Suga described the comments as “outrageous and unacceptable”.
Meanwhile Rabbi Abraham Cooper, of the US-based Holocaust research body Simon Wiesenthal Center, said: “Any person, no matter how creative, does not have the right to mock the victims of the Nazi genocide.”
Mr Kobayashi himself has issued a statement responding to his dismissal.
“Entertainment should not make people feel uncomfortable. I understand that my stupid choice of words at that time was wrong, and I regret it,” it said.
Olympics chief Seiko Hashimoto said she was not aware of the sketch before Mr Kobayashi’s appointment, and apologised for “causing concern to those involved in the Olympics, to the citizens of Tokyo and the Japanese public”.
Despite the last-minute change of leadership, Japan’s prime minister said the event should proceed as planned – kicking off two weeks of competitive events.
But since Mr Kobayashi’s removal, organisers are reassessing plans for ceremony.
To minimise the risk of a Covid outbreak, the event will already be a comparatively subdued affair, with only 950 people in attendance. Spectators have also been barred from most Olympic events.
The head of the Tokyo 2020 Olympic Committee admitted this week that he had not ruled out cancellation, even at this late stage.
Mounting scandals have done little to stop unease about the Games. A recent poll found some 55% of people in Japan were opposed to holding the Games, amid fears it could become a coronavirus super-spreader event, Reuters news agency reported.
Organisers are also dealing with rising Covid case numbers across Japan – a country where only a third of the population have been vaccinated.
Dozens of people involved in the Games – including officials and athletes – have tested positive, and a state of emergency has been declared for the duration of the sporting event.