Olsen, who captained Denmark when they made their impressive 'dynamic' debut at the World Cup finals in 1986, acknowledged Japan are well-organised and difficult opponents but said his side will treat the game as if it was a final.
"It is a decisive game, hopefully the first final for us," said the 60-year-old. "We know what we have to do - that is the name of the game. We just have to be confident."
After one win and one defeat each in their opening games, both nations are level on three points. For Japan, a draw would take them through to the second round for the second time, but for Denmark it would signal elimination.
Netherlands have already secured their qualification for the last 16 by beating the Danes 2-0 and Japan 1-0, while Cameroon are already out after losing twice.
Olsen said he had respect for Japan's resilience and spirit, developed under coach Takeshi Okada, who is in charge at a World Cup for the second time after leading them in France in 1998, and expected a tight contest.
"They have a good group of players who are fighting for their country. They are proud to play for Japan," he said. "They have a good coach who has a good knowledge of football. It won't be easy, but we have to break them down."
PATCHY FORM
Denmark will hope to improve on their patchy form and perform with greater purpose and concentration than they did against Cameroon last Saturday when goals by striker Nicklas Bendtner and winger Dennis Rommedahl gave them victory.
They had to come from behind after Samuel Eto'o capitalised on a Christian Poulsen mistake to fire Cameroon in front.
Poulsen, whose tackling and energy are so important in the Danish midfield, said: "Cameroon were really good, they had a lot of strong players, but they were not well organised. The Japanese are disciplined. It is going to be a very different kind of game -- less open, more tactical."
Okada, who targeted a semi-final place before the tournament began, warned his players to prepare for the "match of their lives" at the Royal Bafokeng Stadium.
He added that Bendtner, back from injury, was the chief threat and they would have to "cut off the supply for him".
That may mean leaving Japan's outstanding creative player Shunsuke Nakamura out again as he did in the 1-0 defeat by the Dutch in Durban when Yoshito Okubo was preferred.
