A recent poll found just one in four people in Japan want them to go ahead next year, with most backing either another postponement or a cancellation.
Coates said the Japanese government "haven't dropped the baton at all" following the postponement, despite the "monumental task" of putting the event back a year.
"Before Covid, (IOC president) Thomas Bach said this is the best prepared Games we've ever seen, the venues were almost all finished, they are now finished, the village is amazing, all the transport arrangements, everything is fine," he said.
"Now it's been postponed by one year, that's presented a monumental task in terms of re-securing all the venues... something like 43 hotels we had to get out of those contracts and re-negotiate for a year later.
"Sponsorships had to be extended a year, broadcast rights."
With much of that work underway, or accomplished, a task force has been set up to look at the different scenarios in 2021 -- from how border controls will affect the movement of athletes and officials, to whether fans can pack venues.
The group, comprising Japanese and IOC officials, met for the first time last week.
"Their job now is to look at all the different counter-measures that will be required for the Games to take place," said Coates, the long-time president of the Australian Olympic Committee.
"Some countries will have it (Covid) under control, some won't. We'll have athletes therefore coming from places where it's under control and some where it is not.
"There's 206 teams... so there's a massive task being undertaken on the Japanese side."