On the 17th, Japan's Nikkei 225 index opened sharply lower, falling over 1% to below 50,000 points before narrowing losses to around 0.5% by 9:50 AM.
Several Japanese consumer stocks saw significant declines. As of the latest update, FOOD&LIFE COMPANIES dropped over 14%, Japan Electronics fell more than 11%, Shiseido slid over 9%, and Isetan Mitsukoshi Holdings declined more than 8%. Other notable decliners included Season Credit, Japan Airport Terminal, MUJI, Sanrio, and H2O Retailing, all down over 7%.
Additionally, JAPAN EYEWEAR fell more than 6%, while Saizeriya, Sharp, Nissan Motor, ASICS, and Japan Airlines dropped over 4%. Fast Retailing, Sony, All Nippon Airways, and Yakult Honsha also declined more than 3%.
According to reports, Japan's Cabinet Office announced on the 17th that the country's third-quarter real GDP contracted at an annualized rate of 1.8%, marking the first negative growth in six quarters. Data showed Japan's Q3 real GDP (adjusted for price changes) fell 0.4% quarter-on-quarter.
On November 7, during a Japanese Diet budget committee session, a high-ranking official openly claimed that a "Taiwan contingency" could constitute an "existential crisis" justifying Japan's collective self-defense rights, hinting at potential military intervention in cross-strait issues. Despite repeated strong protests from China, the official refused to retract the remarks, insisting they aligned with the Japanese government's stance.
On November 14, China's Ministry of Foreign Affairs issued a travel advisory, citing deteriorating public safety in Japan, including multiple unresolved attacks on Chinese citizens. The advisory warned of heightened risks due to recent provocative remarks by Japanese leaders regarding Taiwan, urging Chinese travelers to avoid Japan and those already there to remain vigilant.
Following the advisory, major Chinese airlines introduced flexible rebooking and refund policies. Air China (601111.SH) announced that tickets issued before November 15 for flights to/from Japan between November 15 and December 31, 2025, could be changed or refunded without fees. China Southern Airlines (600029.SH) and China Eastern Airlines (600115.SH) issued similar policies.
China Eastern Airlines (600115.SH) specified that tickets purchased before November 15 for flights involving Japan could be rescheduled within three days of the original departure date without charge. Other airlines, including Spring Airlines (601021.SH), Hainan Airlines (600221.SH), and Juneyao Airlines (603885.SH), also introduced free rebooking and refund options.
Chinese carriers account for about 80% of flights between China and Japan. Data from Flight Master shows that weekly flights from mainland China to Japan dropped significantly, with a 14.5% decline compared to earlier weeks. Airlines may further reduce Japan-bound flights and reallocate capacity to other routes.
Japan National Tourism Organization (JNTO) data revealed that in September 2025, Japan welcomed 3.267 million foreign visitors, up 13.7% year-on-year, including 776,000 from mainland China (+18.9%). In the first three quarters of the year, Chinese visitors totaled 7.487 million, making China Japan's largest inbound tourism market.
China is Japan's largest trading partner, second-largest export destination, and top import source. Bilateral trade reached $308.3 billion in 2024, with Chinese tourists leading in spending. Analysts warn that deteriorating relations would harm Japan's economy.
Japanese media reported that a senior Foreign Ministry official will visit China on November 17 to clarify that recent remarks on Taiwan do not signify a policy shift and to emphasize maintaining people-to-people exchanges despite differences.
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