Japan Tourism Thrives Despite China Dispute

Japan's tourism industry continues to thrive despite a diplomatic rift with China. Visitor numbers increased by 10.4% in November, hitting over 39 million for 2025. However, growth in Chinese visitors slowed due to a diplomatic dispute. Japanese tourism stocks face challenges amid the ongoing tensions.

The tourism sector in Japan remains resilient despite a diplomatic fallout with China. The diplomatic rift stems from Japanese Prime Minister Sanae Takaichi's remarks about Taiwan, leading China to discourage its citizens from traveling to Japan in mid-November. Consequently, Chinese airlines are offering free refunds on flights.

Despite these tensions, Japan saw a 10.4% increase in visitor numbers year-on-year for November, bringing 2025's total above 39 million, surpassing the record set in 2024. However, growth in visitors from mainland China slowed significantly, reflecting the impact of the diplomatic issues.

In the aftermath of China's travel warning, Japan's tourism-related stocks, like department store operator Isetan Mitsukoshi and Tokyo Disneyland operator Oriental Land, experienced setbacks. Yet, mainland Chinese tourists remain a significant portion of this year's visitors, comprising nearly a quarter of the total so far in 2025.

(With inputs from agencies.)