iOS 9.3 is coming in the Spring and will introduce Night Shift as well as a number of other new features.
Apple Launches New 16GB iPod Touch for $199, Drops 32/64GB Models to $249/$299
The 16 GB model now offers the same features as the larger capacity models, although the Loop wrist strap is sold separately on the 16 GB model and included with 32 and 64 GB models.
The fifth-generation iPod touch originally debuted in October of 2012 with a $299 price tag, but Apple expanded the lineup with a lower-cost, silver-only 16GB model that shipped without a rear camera and lower price point of $229. This new $199 16GB model replaces the $229 model in Apple's iPod touch lineup.
Update: Apple has issued a press release announcing the update.