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Japanese tourism and retail stocks tumble after China travel warning
Shares in Japan's tourism and retail sectors plunged on Monday after China advised its citizens against traveling to Japan, escalating tensions between Tokyo and Beijing over Taiwan. The warning, issued amid a diplomatic standoff, triggered sharp declines across airlines, department stores, and theme parks reliant on Chinese visitors.
Market reaction
Japanese department store operators bore the brunt of the sell-off. J. Front Retailing, parent company of Mitsukoshi and Isetan, saw its stock drop nearly 12%, while Takashimaya and Fast Retailing-owner of global fashion brand Uniqlo-each fell over 5%. Cosmetics giant Shiseido also recorded significant losses.
Airlines were not spared: shares in Japan Airlines and ANA Holdings declined, reflecting concerns over reduced travel demand. Oriental Land, operator of Tokyo Disney Resort, closed 5.8% lower as investors anticipated fewer visitors from China, a key market for Japanese tourism.
Diplomatic escalation
The market downturn follows a weekend of heightened tensions. On Sunday, China's government urged citizens to "reconsider" studying in Japan, citing safety risks and a rise in crimes targeting Chinese nationals. The Education Ministry advised students already in Japan to "monitor the security situation closely."
Over 100,000 Chinese students were enrolled in Japanese institutions last year, per government data. Meanwhile, major Chinese carriers-China Southern Airlines, China Eastern Airlines, and Air China-began offering refunds for flights to Japan, further signaling a pullback.
Military tensions and public opinion
The dispute centers on Taiwan, which Beijing claims as a breakaway province. Japanese Prime Minister Sanae Takaichi stated on 7 November that a Chinese attack on Taiwan could constitute a "survival-threatening situation" for Japan-a legal term under its 2015 security law permitting military intervention to protect allies. Taiwan lies just 100 km (62 miles) from Japan's southernmost islands.
A Kyodo News poll released Sunday revealed divided public opinion: Japanese citizens are split on whether the country should invoke self-defense if China attacks Taiwan. Beijing maintains it will not rule out force to reunify with Taiwan, though most Taiwanese favor maintaining the status quo.
Next steps
Chinese and Japanese officials are scheduled to hold talks on Tuesday. Tokyo's Chief Cabinet Secretary Minoru Kihara criticized Beijing's actions as inconsistent with prior agreements to foster a "stable and mutually beneficial" relationship. The outcome of the discussions could further influence market sentiment and cross-strait dynamics.
