• Japan's tourism and retail stocks fell significantly after China warned its citizens against traveling to Japan.
• Prime Minister Sanae Takaichi's remarks regarding Taiwan led to this backlash from China.
• Cosmetics firm Shiseido, department stores Takashimaya and Isetan Mitsukoshi reported sharp declines in their stock prices.

Shares of Japanese tourism and retail companies sharply declined on Monday after China advised its citizens against travelling to Japan, escalating tensions stemming from remarks made by Prime Minister Sanae Takaichi regarding Taiwan. Specifically, shares in leading cosmetics company Shiseido plummeted nearly 10%, while Takashimaya and Fast Retailing, owner of Uniqlo, fell over 5% in early trading, reflecting investor concerns about the implications of the diplomatic dispute, according to Channel News Asia and BBC.

Takaichi, noted for her criticisms of China's military actions, suggested in early November that Japan could intervene militarily if Beijing were to attack Taiwan, referring to such a situation as potentially "survival-threatening." This caused China to issue a travel warning, accusing Japan of endangering the safety of Chinese visitors, thus further straining their bilateral relations, according to Al Jazeera and BBC.

As the market reacted, department store Isetan Mitsukoshi experienced a decline of over 11%, while Japan Airlines and other airlines witnessed similar drops. The Japanese economy is heavily reliant on Chinese tourists, who accounted for nearly a quarter of all arrivals in Japan, which raised fears of economic repercussions from reduced tourism, according to Al Jazeera and Channel News Asia.

Japan's Chief Cabinet Secretary Yoshihide Suga remarked that China’s travel warning was inconsistent with mutually beneficial ties and highlighted that Japan has requested appropriate measures from the Chinese government. The situation has led to the departure of Masaaki Kanai, Japan’s top official for Asia-Pacific affairs, to China for talks aimed at de-escalating tensions, consistent with reports from Al Jazeera and BBC.