Earlier this week, Japan’s retail and tourism sectors took a heavy hit after China’s Ministry of Culture and Tourism advised citizens to postpone trips to the country. The announcement on Monday sent shares of well-known Japanese brands into freefall.
By mid-afternoon trading, Shiseido plunged as much as 11.4 percent, marking its steepest one-day drop since April. Pan Pacific International Holdings, owner of Don Quijote stores, slid 9.7 percent, its biggest fall since August last year. Department store operator Isetan Mitsukoshi fell 10.7 percent, poised for its largest decline in over a year, while Takashimaya and J Front Retailing each lost more than 6 percent.
Theme park operator Oriental Land, the parent of Tokyo Disneyland, saw shares drop 5.1 percent, and Fast Retailing, owner of Uniqlo, slid 6.9 percent—the biggest slide since mid-July. Japan Airlines also dipped nearly 4 percent. The ripple effect extended to entertainment: releases of 'Crayon Shin-chan the Movie: Super Hot! The Spicy Kasukabe Dancers' and 'Cells at Work!' in China were postponed.
The market reaction follows remarks by Prime Minister Sanae Takaichi on November 7. At a Diet session, she said the Self-Defense Force could exercise collective self-defense if the Chinese mainland uses military forces against Taiwan. Despite démarches and protests from China, she declined to retract her statement, underscoring rising geopolitical risks in the Taiwan Strait.
This latest episode illustrates how political flashpoints can quickly sway consumer confidence and capital flows across Asia. As tensions linger, investors and travelers alike will be watching for signs of stabilization or further fallout.
Reference(s):
cgtn.com
