Japanese tourism and retail stocks fell Monday as the country’s diplomatic spat with China weighed on investors.
Nearly 500,000 Japan-bound plane tickets on Chinese airlines were canceled after Beijing told citizens to avoid traveling there, the South China Morning Post reported. The row stemmed from the new Japanese premier’s comments about Taiwan; Tokyo dispatched a senior official to China on Monday in a bid to ease tensions. This isn’t a “crisis moment,” FXStreet wrote, but rather a “meaningful reset in Asia’s geopolitical risk premium.”
Beijing — which is known to test new, Taiwan-sympathetic leaders — sees a global diplomatic tilt in favor of Taipei and wants to signal that “rhetorical shifts around Taiwan… will be met with economic consequences.”