Ms. Takaichi, seen as a China hawk, steered this month that shut U.S. ally Japan may intervene militarily in any assault on the self-ruled island, which Beijing claims.
Asia’s two prime economies are carefully entwined, with China the most important supply of vacationers going to Japan —virtually 7.5 million within the first 9 months of 2025.
Drawn by a weak yen making purchasing cheaper, they splashed out 590 billion yen ($3.8 billion) within the third quarter — 28% of all spending by international vacationers, Transport Ministry information reveals.
Japan was additionally the fourth-most widespread vacation spot for Chinese vacationers final yr, serving to the land of Mount Fuji, sushi and geishas set new information for international arrivals. Investors wiped as a lot as 11.4% off Japanese cosmetics agency Shiseido’s shares on Monday (November 17, 2025).
Department retailer group Takashimaya fell six per cent and Pan Pacific, behind low cost retail chain and vacationer magnet Don Quijote, slid as a lot as 8.4%. Uniqlo proprietor Fast Retailing — which has a significant presence in China — fell by shut to 6 per cent.
Before taking energy final month, Ms. Takaichi, an acolyte of ex-premier Shinzo Abe, was a vocal critic of China and its army build-up within the Asia-Pacific.
If a Taiwan emergency entails “battleships and the use of force, then that could constitute a situation threatening the survival (of Japan), any way you slice it,” Ms. Takaichi (64) instructed Parliament on November 7.
Under Japan’s self-imposed guidelines, an existential menace is among the few instances the place it may possibly act militarily. Taiwan sits round 100 km (60 miles) from the closest Japanese island.
The feedback got here simply days after Ms. Takaichi met Chinese President Xi Jinping for an apparently cordial first assembly on the sidelines of an APEC summit.
Ms. Takaichi, who has visited Taiwan and known as for nearer safety cooperation, additionally met individually with Taipei’s consultant on the summit.
Her latest feedback have sparked a furore, with a Chinese diplomat stationed in Japan threatening to “cut off that dirty neck”, apparently referring to Ms. Takaichi.
China and Japan final week summoned one another’s Ambassadors, with Beijing then advising its residents to keep away from travelling to Japan and warning Chinese college students in Japan there have been dangers to their security.
More than 1,00,000 Chinese college students had been enrolled in academic establishments in Japan final yr, in response to the Japanese authorities.
Japan’s Chief Cabinet Secretary Minoru Kihara instructed reporters on Monday (November 17, 2025) that the announcement was “incompatible with the broader direction agreed upon by the leaders of the two nations”.
“On Sunday (November 16, 2025), Chinese coast guard vessels spent a number of hours in Japan’s territorial waters across the disputed Senkaku Islands, generally known as the Diaoyu in China,” Mr. Kihara mentioned. Beijing insists Taiwan, which Japan occupied for many years till 1945, is a part of its territory.
“Japanese media experiences mentioned the highest official within the Foreign Ministry for Asia-Pacific affairs headed to China on Monday (November 17, 2025). Masaaki Kanai was on account of maintain talks along with his Chinese counterpart Liu Jinsong,” the experiences mentioned.
“The diplomatic spat may spell additional unhealthy information for Japan’s economic system, which shrank by 0.4 p.c within the third quarter,” official information confirmed on Monday (November 17, 2025).
Marcel Thieliant at Capital Economics warned that the tensions risked escalating “into a full-blown trade spat” just like a earlier episode within the early 2010s. This may embrace China proscribing exports of uncommon earths or imposing restrictions on Japanese exports.
“Carmakers look particularly vulnerable as they are already under enormous pressure from the ascent of Chinese electric vehicle manufacturers,” Mr. Thieliant added.
