The driver said he had been distracted by the game after his arrest for negligent driving following the accident on Wednesday evening, a spokesman for the Tokushima prefectural police said.
"The driver is still in custody. No decision has been made yet on whether to proceed with a prosecution," he added.
A spokesman for Niantic, which developed Pokemon Go jointly with Nintendo affiliate Pokemon Company, said the company had added a pop-up to the Pokemon Go screen when it detected an increase in speed asking for confirmation the user was not driving.
He didnt say whether the developer would take further steps to guard against accidents.
A spokesman for Nintendo offered condolences to the family of the dead woman, Reuters reported.
"Pokemon Company and Niantic endeavour to create an environment where people can play the game safely and we will continue to do that," he added when asked whether the company would take any new measures to guard against accidents.
The popularity of augmented-reality Pokemon Go around the world has generated crowds of people in parks and other public places as user search for monsters, but has also been blamed for injuries and robberies of distracted users.
Signs at parks and other places in Japan have asked users to avoid creating a nuisance.