Japan's tourism stocks plunge amid spat with China

"Relations between Tokyo and Beijing have plummeted over Japanese leader's recent remarks on Taiwan. Japanese shares linked to the tourism industry have nosedived following China's warning to its citizens against travelling to Japan. Relations between Tokyo and Beijing have plummeted since Japanese Prime Minister Sanae Takaichi suggested earlier this month that Japan's military could intervene to stop China from taking control of Taiwan."

"In a sharp escalation of the dispute on Friday, China's Ministry of Foreign Affairs advised citizens to avoid travel to the East Asian country, claiming that Takaichi's comments had increased risks to their personal safety and lives. The issue continued to reverberate as Japan's stock market reopened on Monday after the weekend break, with shares of airlines and retail outlets taking sharp falls. Department store group Isetan Mitsukoshi fell more than 11 percent in afternoon trading, while its rival Takashimaya tumbled about 5 percent."

"Ryota Abe, an economist at Sumitomo Mitsui Banking Corporation, said Japan's gross domestic product (GDP) could shrink by about 0.5 percent in the event of a total collapse in Chinese arrivals and by about 0.1-0.2 percent if arrivals decreased by about one-third. Even if the number of visitors decreases 30 percent because of the heightened tensions, the negative impact will be around 0.1-0.2 percent, Abe told Al Jazeera."

Relations between Tokyo and Beijing have plummeted after Japanese Prime Minister Sanae Takaichi suggested earlier this month that Japan's military could intervene to stop China from taking control of Taiwan. China advised its citizens to avoid travel to Japan, citing increased risks to personal safety and lives. The travel advisory triggered sharp falls in tourism-linked Japanese stocks, with major retailers, airlines, and cosmetics firms plunging. China accounted for almost one-quarter of Japan's 31.65 million arrivals in the first nine months of the year. Economist Ryota Abe estimated GDP could shrink about 0.5 percent with a total collapse in Chinese arrivals, or about 0.1–0.2 percent with a one-third decline. Japan's economy contracted 0.4 percent in the three months to September, the first contraction in six quarters.

Read at www.aljazeera.com