Prime Minister Yoshihide Suga is set to declare a state of emergency for the Tokyo metropolitan area.

Japan's Prime Minister Yoshihide Suga has declared a state of emergency for the nation's capital and surrounding areas as Covid-19 cases surge to the highest levels since the start of the pandemic.

The emergency declaration will be in place from Friday until February 7 and applies to Tokyo and the three neighboring prefectures of Chiba, Saitama and Kanagawa. The emergency includes a number of restrictions on daily life.

Suga has ordered companies to encourage their staff to work from home and reduce office populations by 70%.

Residents of the affected areas are also urged to avoid non-essential outings. The hospitality sector has been hit, with restaurants ordered to close by 8 p.m. and sporting events have been instructed to limit the amount of spectators present.

Suga said Thursday that the government will provide up to 1.8 million yen ($17,400) per month to each restaurant that complies with a request to shorten its operating hours.

Despite the raft of new measures, schools will remain open.

Japan's leader stressed that the country still intends to hold the Tokyo Olympic and Paralympic games in July, despite the emergency.

Suga has been criticized for what has been perceived as his reluctance to take action to combat the spread of the virus, after the governor of Tokyo and the three neighboring prefectures urged him to issue an emergency declaration during a televised press conference last week.

Japan's first state of emergency, declared last spring, relatively early in the pandemic, lasted more than a month, and saw schools and non-essential businesses closed.

The state of emergency comes as new Covid-19 cases and hospitalizations in Tokyo and the rest of the country, surge to their highest levels.

On Thursday, Japan reported a record number of daily new infections for the third day in a row, with 7,548 new cases and 66 additional deaths. It's the first time infections have surpassed 7,000 since the pandemic began.

The national total now stands at 266,011 cases and 3,870 fatalities.

The greater Tokyo region has been among the worst hit, surpassing 2,000 daily cases on Thursday for the first time with a record 2,447 new infections, according to updated figures from the Tokyo metropolitan government.

The number of seriously ill Covid-19 patients in need of hospitalization also continued to rise. In the capital, there were 121 patients in serious condition on Thursday with more than 3,000 receiving medical care in hospital.