Hanyu was diagnosed with bruising to his head and chin after a scary collision with Chinese skater Yan Han in warmups for the Cup of China three weeks ago.
On Thursday, Hanyu said the importance of making the GP Final and his gradually improving condition in Wednesday's practice helped him decide to go ahead with his program in the sixth and final event of the International Skating Union's Grand Prix series.
"I am determined to compete in the final," Hanyu said at a news conference on Thursday. "I am not in perfect condition and my energy level has dropped but I want to put on the best performance I can."
The Japan Skating Federation said the decision to let Hanyu skate in this weekend's event was made in consultation with members of the federation, a doctor and his coach Brian Orser.
Three male skaters have already earned berths in the GP Final in Barcelona next month: Tatsuki Machida of Japan, Maxim Kovtun of Russia, and Javier Fernandez of Spain.
In addition to Hanyu, Takahito Mura of Japan, who won Skate Canada, and Rostelecom Cup silver medallist Sergei Voronov of Russia are tipped to secure spots for Barcelona. Jeremy Abbott of the United States would need to upset the favourites in the last event of the GP series to qualify.