Recent interventionist statements by Prime Minister Sanae Takaichi prompted the Chinese government to urge its citizens to avoid travel to Japan, after criticizing the nation’s current “erroneous path of military rearmament.”

At the start of the week, during the morning session, Shiseido—a cosmetics giant—suffered a plunge of nearly nine percent, while Takashimaya—a leading retailer—fell more than five percent, and Fast Retailing—parent company of the popular Uniqlo brand—lost around four percent.

The market reaction reflects Japan’s enormous dependence on Chinese tourism, considered its main source of foreign visitors and a key driver for sectors such as fashion, hospitality, and luxury goods.

Takaichi suggested that a potential attack on Taiwan by mainland China could force Tokyo to respond militarily, and despite demands from the Chinese government, he refused to retract his statements.

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