TV footage showed smoke rising from Fukushima plant's reactor 3, a day after an explosion hit reactor 1.
Japan's nuclear safety agency said the blast was believed to have been caused by the build-up of hydrogen.
Government officials said the reactor core was still intact as they tried allay fears of a radioactive leak.
Technicians have been battling to cool three reactors at the Fukushima 1 plant since Friday, when the quake and tsunami combined to knock out the cooling system.
Evacuations
The natural disaster killed hundreds and left thousands missing, sparking a huge rescue operation.
Japanese police have so far confirmed 1,597 deaths because of the natural disasters, but the final toll is expected to be much higher.
Kyodo news agency reported that 2,000 bodies had been found on the shores of Miyagi prefecture on Monday, but the claims could not be verified.
Tens of thousands of people have been evacuated from the area around Fukushima nuclear plant.
At least 22 people are now said to be being treated for the effects of exposure to radiation.
Government spokesman Yukio Edano said there was a low possibility of radioactive contamination from the latest explosion at the plant.
He said the reactor's containment vessel had resisted the explosion.
The operators of the Fukushima plant said seven people were missing and three were injured by the blast.
Experts say a disaster on the scale of Chernobyl in the 1980s is highly unlikely because the reactors are built to a much higher standard and have much more rigorous safety measures.
Powerful aftershocks
Earlier, Mr Kan said the situation at the nuclear plan was alarming, and the earthquake had thrown Japan into "the most severe crisis since World War II".
And the capital is also still experiencing regular powerful aftershocks.
Meanwhile, tens of thousands of relief workers, soldiers and police have been deployed to the disaster area.
Rescue workers have found scenes of total devastation in isolated coastal towns north-east of the main port city of Sendai, which was itself partially destroyed by the waves.
Preliminary estimates put repair costs from the earthquake and tsunami in the tens of billions of dollars, a huge blow for the Japanese economy that - while the world's third largest - has been ailing for two decades.
The government has pumped 7 trillion yen ($86bn; £54bn) into the economy to prop up the markets - which slumped on opening.
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