Japanese tourism-related stocks experienced a notable decline on Monday following a travel alert issued by Beijing advising its citizens against visiting Japan. Notably, the beauty and cosmetics company Shiseido saw its shares plummet by 9.08%, while Isetan Mitsukoshi Holdings, which oversees major department store chains, experienced a loss exceeding 11%.
The downturn in the market comes amid rising diplomatic tensions between Japan and China. Masaaki Kanai, a director-general at Japan’s Ministry of Foreign Affairs, is set to meet with his Chinese counterpart, Liu Jinsong, on Tuesday, as the Japanese government seeks to address and reduce these tensions. A senior official from Japan’s foreign ministry has already been dispatched to China, highlighting the urgency of the situation.
China’s discontent was fueled by recent statements from Japanese Prime Minister Sanae Takaichi, who suggested that any military conflict over Taiwan could pose a significant threat to Japan’s survival. Beijing branded these remarks as “egregious” and demanded a retraction, describing Japan’s comments as a provocation that raises concerns among its regional neighbors and the international community. In response to the heightened tensions, Chinese airlines are offering full refunds and free itinerary alterations for flights to Japan.
Despite this diplomatic feud, data indicates a strong interest in Japan among Chinese travelers. Reports show that in the first 11 months of 2024, Japan was the fourth-most popular destination for outbound Chinese travelers, with over 5% of all overseas trips directed to the country. Approximately one-fifth of international visitors to Japan in 2024 originated from China, amounting to around 7 million individuals.
The Japanese government, represented by spokesperson Minoru Kihara, has urged China to respond in a measured manner while calling for appropriate measures to mitigate the situation. This call for dialogue comes in the wake of a historical context in which nationalist sentiments in China have previously led to boycotts against Japanese brands, notably following Japan’s release of treated wastewater from the Fukushima nuclear plant in 2023.
While current circumstances pose challenges for Japan’s tourism sector, the historical patterns of travel and commerce between the two nations suggest a resilient potential for recovery in the long term. With ongoing diplomatic efforts, both nations may find pathways to restore cordial relations and revitalize cross-border tourism.