Tourism Shares Drag down Nikkei Amid China-Japan Spat over Taiwan (UPDATE 1)　

Reuters

12:57 JST, November 17, 2025 (updated at 16:20 JST)

TOKYO, Nov 17 (Reuters) – Japan’s Nikkei share average closed slightly lower on Monday, as tourism-related stocks tumbled after China warned its citizens against travel to Japan amid a worsening diplomatic rift over Taiwan.

The Nikkei .N225 finished 0.1% lower at 50,323.91, after rising as much as 0.4% earlier in the session. The broader Topix .TOPX fell 0.37% to 3,347.53.

On Friday, China warned Tokyo of a “crushing” military defeat if it used force to intervene over Taiwan and warned Chinese citizens against visiting Japan.

Tensions between Tokyo and Beijing have flared up since Japanese Prime Minister Sanae Takaichi said earlier this month that a Chinese attack on Taiwan could amount to a “survival-threatening situation” and trigger a potential military response from Tokyo.

Japanese retailers rely a lot on Chinese tourists, who spend a large amount of money in buying clothing and cosmetics.

Shares of department stores fell, with Isetan Mitsukoshi Holdings 3099.T down 11%. Takashimaya 8233.T lost 6.18%, while cosmetics maker Shiseido 4911.T fell 9.08%.

Uniqlo-brand owner Fast Retailing 9983.T lost 5.29% to become the biggest drag on the Nikkei.

“Market reaction to those stocks was a little bit too much. Investors might have priced in all the bad news regarding the relationship between China and Japan,” said Shoichi Arisawa, general manager of the investment research department at IwaiCosmo Securities.

“I do not think the sell-off of those stocks would continue.”

Lending some support to the market, technology stocks rose as investors snapped up chip and artificial intelligence-related shares on dip.

Chip-making equipment maker Tokyo Electron 8035.T rose 4.55% to become the biggest support for the Nikkei. SoftBank Group 9984.T gained 2.83%.

Mitsui Kinzoku 5706.T, a maker of data center materials, jumped 8.87%.

Sumitomo Mitsui Financial Group8316.T rose 4.57% after the country’s second-largest banking group posted a 57% rise in July-September quarter net profit on Friday.

Mitsubishi UFJ Financial Group 8306.T and Mizuho Financial Group 8411.T slipped 1% and 0.26%, respectively, even as they posted higher quarterly net profits.