Japan Stocks Slide Amid China Travel Warning Over Taiwan

Tokyo saw a sharp decline in tourism and retail stocks on Monday, triggered by a warning from China urging its citizens to reconsider traveling to Japan. The advisory comes amid escalating tensions between Tokyo and Beijing over Taiwan.

Japanese department stores bore the brunt of the sell-off. The parent company of Mitsukoshi and Isetan plummeted nearly 12%, while Takashimaya and the owner of Uniqlo saw their shares drop more than 5%. Cosmetics giant Shiseido also experienced a steep fall. Airlines were affected as well, with Japan Airlines and ANA Holdings reporting losses, and theme park operator Oriental Land, which runs Tokyo Disney Resort, ended the day 5.8% lower.

China has traditionally been one of the largest sources of tourists for Japan, making this warning a significant blow to the sector. Over the weekend, Chinese airlines including China Southern, China Eastern, and Air China began offering refunds for Japan-bound flights.

The travel advisory also extended to Chinese students, with the Education Ministry urging those already studying in Japan to monitor safety closely. Last year, Japan hosted more than 100,000 Chinese students, according to government data.

This escalation follows remarks by Japan’s Prime Minister Sanae Takaichi, who recently suggested that Tokyo could take military action if Beijing attacked Taiwan. Taiwan lies just over 100 km from the nearest Japanese island, heightening the strategic sensitivity of the region. Takaichi described such a scenario as a "survival-threatening situation," a term under Japan’s 2015 security law that allows the Self-Defense Forces to respond to existential threats.

A recent Kyodo poll indicates that the Japanese public is divided on whether the country should exercise this right of self-defense if China attacks Taiwan. Diplomatic talks between officials from both countries are expected to take place soon, as tensions continue to simmer.