China's Probe Shakes Japan's Chemical Sector

Shares in Japanese chemical firms dipped after China announced an anti-dumping investigation into chemicals used in chipmaking. Amid worsened relations following geopolitical tensions, Shin-Etsu and Mitsubishi faced losses. The tension heightened after Japan's stance on China-Taiwan relations, further straining diplomatic ties.

Shares of Japanese chemical manufacturers plummeted on Thursday following China's commerce ministry announcement of an anti-dumping investigation into imported chemicals essential for chipmaking. Among those hardest hit were Shin-Etsu Chemical, with a 4% drop, and Mitsubishi Chemical, down by 1%, against a backdrop of negligible movements in the benchmark index.

This investigation targets dichlorosilane imports from Japan, escalating tensions between the two nations. Additionally, China declared an export ban on dual-use items to Japan, aggravating the diplomatic strain further. Such actions follow heightened political friction marked by Japan's stance on a potential Chinese threat involving Taiwan.

The relationship between China and Japan has been increasingly fraught ever since Japan's Prime Minister Sanae Takaichi's November statement defined a potential Chinese attack on Taiwan as a direct threat to Japan, a claim criticized by China's government as 'provocative.'