"Can we prohibit that? That's not conceivable," Muto added. "It would be very difficult to do so."
But he said it might be banned from dining areas and other public areas in the village.
Tokyo and much of the rest of the country is under a state of emergency, with many bars and restaurants closing early and banning alcohol sales. The emergency order ends on June 20 and it's not clear if it will be extended.
Depending how the question is asked, 50-80% of Japanese people oppose holding the Olympics. If the state of emergency is extended, many Japanese residents might not be happy seeing athletes partying in the village when regular citizens cannot do the same in local pubs.
New cases have been falling in Tokyo over the last several weeks. Japan overall has attributed about 14,000 deaths to COVID-19, good by global standards but not as good as some Asian neighbors.
"We have not yet clearly decided on the (alcohol) policy," Muto said. "We hope to do so by the end of this month."
Looking for more fun? There's the matter of GPS monitoring.
Muto said athletes — as well as media, broadcasters and others — will have to sign papers allowing organisers to use GPS to monitor their movements at the Olympics through smartphones.
Athletes will be isolated in a bubble-atmosphere in the village and are expected to stay there, or be in a similar bubble at venues or training sites.
Everyone else entering Japan for the Olympics will be tested twice before leaving home, and upon arrival in Japan. They will have to agree to limit their movements for the first 14 days and submit an activity plan.
"We are not going to monitor at all times the behaviour," Muto said. "It's not for that purpose. The thing is, though, if there should be issues pertaining to their activity then, since the GPS function will be on, we'll be able to verify their activities."