Japanese stocks fell on Thursday, weighed by concerns over a spike in domestic coronavirus infections and the potential return of restrictions on economic activity.

The Nikkei 225 Index ended down 0.07 at 29,708.98, while the broader Topix fell 0.79 to 1,951.86.

The governor of Tokyo said on Thursday she would request that the central government adopt emergency measures in the capital in response to a sudden increase in coronavirus infections and the spread of a new variant of the virus.

The western city of Osaka is also set to declare a medical emergency after its number of new infections rose to a record high, which has sparked alarm among public health officials.

Reduced operating hours for restaurants and shops intended to slow the infection rate could hamper economic growth. In addition, more analysts are starting to express concern about Japans slow pace of vaccination against the coronavirus.

Japanese equities may slow down relative to other markets, Masayuki Kichikawa, chief macro strategist at Sumitomo Mitsui Asset Management Co said.

Markets are placing a lot of emphasis on the size of fiscal stimulus and the vaccination rate. More restrictions would be a negative factor because that would delay a recovery in services consumption.

The underperformers on the Topix 30 were Takeda Pharmaceutical Co Ltd, down 3.08, followed by Mitsubishi UFJ Financial Group Inc, losing 2.51.

A gainer was Metals Ltd, which rose 4.85, after the Nikkei newspaper reported that…