• Tokyo cases at 2,447, surging past previous daily record
• Measures to be limited vs state of emergency last spring
• Prime Minister Suga to hold news conference at 0900 GMT
• Economy to take hit in Q1 - analysts

TOKYO: Japan looked set to impose a one-month state of emergency in Tokyo and three neighbouring prefectures after an advisory panel signed off on it Thursday, while the capital announced a record 2,447 new coronavirus cases.

The proposal for an emergency declaration running from Jan. 8 to Feb. 7 was approved at a morning meeting, Economy Minister Yasutoshi Nishimura said. Its restrictions centre on measures to combat transmission at bars and restaurants, cited by the government as key risk areas.

Though still less seriously affected by the pandemic than many countries around the world, Japan saw new daily infections top 6,000 for the first time on Wednesday.

Positive tests in Tokyo on Thursday jumped from the record of 1,591 the previous day, the metropolitan government said.

Prime Minister Yoshihide Suga will hold a news conference at 6 p.m. (0900 GMT) to formally announce the decision and curbs to be imposed in Tokyo and the neighbouring Saitama, Kanagawa and Chiba prefectures - about 30% of the country's population.

But medical experts have said they fear the government's plans might be inadequate, with new cases hitting highs around the country.

Government officials have been in talks with experts this week to assess steps to try to bring the surge under control with as little damage as possible to the economy.

With an eye on the looming Tokyo Olympics and the fragile state of the world's third-biggest economy, Suga has favoured limited restrictions.

Measures to be included in the state of emergency from Friday include asking restaurants and bars to close by 8 p.m., requesting residents to refrain from non-urgent outings, urging telecommuting, and limiting attendance at sporting and other big events to 5,000 people. The four prefectures are home to about 150,000 restaurants and bars.

Ahead of the declaration, the Tokyo Metropolitan Government said on Thursday that upcoming exhibitions of the Olympics torch around the capital have been postponed "to reduce the flow of people and the further spread of COVID-19."

Prime Minister Suga has said shorter operating hours for bars and restaurants had helped bring cases down in regions such as Osaka and Hokkaido.

But in a worrying sign, Osaka on Wednesday reported new cases easily topped their previous record, with 560 infections, while Hokkaido saw cases surpass 100 for the first time in a week.

"Depending on the way infections spread from here on, we may need to think about a state of emergency nationwide," Toshio Nakagawa, president of the Japan Medical Association, said on Wednesday.

MORE PAIN FOR RESTAURANTS, BARS

According to simulations by Kyoto University scientist Hiroshi Nishiura, daily infections in Tokyo could reach 3,500 per day by February and hit 7,000 by March without new measures. An emergency declaration would need to last at least two months to bring infections to manageable levels, he said.

Already, eating and drinking establishments are suffering.

Tokyo-based Teikoku Databank said this week bankruptcies in the sector hit an all-time high of 780 in 2020, up from the previous year's record of 732. Local media said the government would raise the maximum compensation for the restaurant business to 60,000 yen ($582) a day from 40,000 yen.

The loose curfew prompted some businesses not covered by the programme including department store operator Isetan Mitsukoshi and Tokyo Disney Resort to also shorten their hours.

Analysts now say the new state of emergency would probably trigger an economic contraction in the first quarter - a reversal from a 2.1% annualised expansion forecast in a Reuters poll last month. ($1 = 103.1300 yen)