Japanese tourism and retail stocks fell on Monday after China warned its citizens not to travel to the country as Tokyo and Beijing remain locked in a row over Taiwan.
Japan’s Prime Minister Sanae Takaichi, who has been a vocal critic of China and its military activities in the region, suggested this month Tokyo could take military action if Beijing attacked Taiwan.
Shares in cosmetics company Shiseido plunged nearly 10% while department store chain Takashimaya and the owner of global fashion chain Uniqlo fell more than 5% in early trading.
China has consistently ranked among the top sources of tourists visiting Japan.
The share price falls came after the dispute between Beijing and Tokyo has deepened in recent days.
On Sunday, the Chinese government urged its citizens to reconsider studying in Japan, citing risks to their safety and a rise in crimes targeting Chinese people.
China’s Education Ministry also told students already based in Japan to closely monitor the security situation.
Last year, more than 100,000 Chinese students were enrolled in educational institutions in Japan, according to a Japanese government survey.
Also over the weekend, Chinese airlines – including China Southern Airlines, China Eastern Airlines, and Air China – offered refunds for flights to Japan.
Takaichi said in the Japanese parliament on 7 November: “If there are battleships and the use of force, no matter how you think about it, it could constitute a survival-threatening situation.”
A “survival-threatening situation” is a legal term under Japan’s 2015 security law, referring to when an armed attack on its allies presents an existential threat to Tokyo.
In such a situation, Japan’s self-defence forces can be called upon to respond to the threat.
Taiwan lies around 100km (60 miles) south of the closest Japanese island.
Beijing sees Taiwan as a breakaway province that will, eventually, be part of the country, and has not ruled out the use of force to achieve this.
But many Taiwanese consider themselves to be part of a separate nation – although most are in favour of maintaining the status quo where Taiwan neither declares independence from China nor unites with it.
