What’s going on here?
Japanese tourism and retail firms stumbled after Japan’s Prime Minister made comments about Taiwan, drawing warnings from China and cooling Tokyo’s stock market.
What does this mean?
Japanese stocks opened lower, with the Nikkei down 0.5% and the Topix slipping by 0.67%. Tourism and retail names took a hit after Japan’s leader suggested the country could get involved in any Taiwan conflict, which led China to urge its citizens to avoid travel to Japan. That sparked some outsized drops: Isetan Mitsukoshi crashed nearly 11%, Takashimaya shed over 6%, Shiseido fell about 9.5%, and Fast Retailing slid 5.5%, making it the Nikkei’s largest drag. Not everyone suffered: a strategist at IwaiCosmo Securities called the sell-off likely overdone, and tech-focused shares, including AI and data plays, actually gained, softening the blow to the broader market.
Why should I care?
For markets: Tech resilience softens the blow.
Travel and retail stocks drove the Nikkei lower, but heavyweight tech firms offered some stability. SoftBank Group popped 3%, leading the index higher, while Fujikura and Mitsui Kinzoku rose on digital infrastructure demand. That shift hints investors are still piling into tech, despite nerves elsewhere. And in financials, Sumitomo Mitsui Financial Group’s 57% profit boost sent its shares almost 4% higher—a welcome outlier amid retail’s slump.
The bigger picture: Geopolitics sets the tone in Asia.
Rising tensions between Japan and China are doing more than fueling headlines—they’re moving markets and reshaping expectations. Even banks with strong results, like Mitsubishi UFJ and Mizuho, watched their stock prices sink as uncertainty ramped up. The selloff shows just how quickly geopolitics can ripple through Asia’s markets, prodding investors to rethink exposure beyond just numbers on earnings reports.
AloJapan.com