The observatory says the Strong Wind Signal Number 3 will stay in place until at least midday on Sunday as Typhoon Matmo edges closer to Hong Kong.

A signal 8 appears to be unlikely now, with the observatory saying in an update at 9.45pm on Saturday that unless the storm comes closer to the Pearl River Estuary than expected, the chance of sustained gale force winds generally over Hong Kong is relatively low.

It added that it is thought Matmo will be closest to Hong Kong on Sunday morning, skirting more than 300 kilometres to the southwest of the territory.

Nevertheless, it warned of occasional squally showers, thunderstorms and violent gusts, and said seas will be rough with swells.

"Members of the public are advised to stay away from the shoreline and not to engage in water sports," it said.