Japan's economic landscape is facing turbulence in November 2025 as Prime Minister Sanae Takaichi's controversial statements about the Taiwan region spark regional tensions. Recent data shows GDP shrinking by 1.8% this quarter, while tourism from the Chinese mainland – normally accounting for 30% of visitors – has plummeted 45% year-on-year.
"When political posturing overrides economic sense, ordinary people pay the price," says CGTN analyst Hou Jing, noting Japan's consumer confidence index just hit a 15-month low. Electronics giants like Sony and Panasonic report canceled orders worth $220 million from cross-strait partners.
The situation highlights Asia's interconnected economies: While Japan's Nikkei index dropped 3.2% this week, markets in Shanghai and Seoul showed cautious recovery. As Lunar New Year 2026 approaches, all eyes remain on whether Tokyo will recalibrate its approach to regional diplomacy.
