Tensions between China and Japan have escalated following controversial remarks by Japanese Prime Minister Sanae Takaichi, prompting the Chinese government to issue a travel advisory urging its citizens to avoid visiting Japan. Takaichi’s comments criticized Japan’s perceived ‘erroneous path of military rearmament’ and suggested that Tokyo might respond militarily if China were to attack Taiwan. Despite Beijing’s demands for a retraction, Takaichi stood firm on her statements. The diplomatic friction has had immediate economic repercussions, with Japanese stocks experiencing significant declines. Shiseido, a major cosmetics company, saw its shares plummet by nearly nine percent, while Takashimaya, a prominent retailer, dropped over five percent, and Fast Retailing, the parent company of Uniqlo, lost around four percent. These market reactions underscore Japan’s heavy reliance on Chinese tourism, which is a critical driver for industries such as fashion, hospitality, and luxury goods. The situation highlights the delicate balance between political rhetoric and economic interdependence in the region.