Within days of China urging its citizens not to travel to Japan due to a diplomatic dispute, Tokyo-based tour operator East Japan International Travel Service had lost 80% of its bookings for the remainder of the year.

Tension between Japan and China has escalated over the new Japanese leader's suggestion Tokyo could intervene militarily if Beijing attacks Taiwan.

Japan has warned its citizens in China to step up safety precautions and avoid crowded places amid a deepening dispute between Asia's two largest economies over Japanese Prime Minister Sanae Takaichi's comments on Taiwan.

Japan has warned its citizens in China to step up safety precautions and avoid crowded places, amid a deepening dispute between Asia's two largest economies over Japanese Prime Minister Sanae Takaichi's comments on Taiwan.

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An opening attempt to cool tensions between China and Japan appears to have fallen flat, signaling that the diplomatic spat is likely to drag on and stoking concerns about further strain in economic ties.

From China’s point of view, the Japanese Prime Minister’s remarks on Taiwan test a red line - a trigger that sets this dispute apart from past flare-ups, analysts say.

China has intensified its economic pressure on Japan, with state-owned enterprises banning employees from travelling to its Asian neighbour, tour groups and a flagship forum being cancelled and Japanese film releases suspended.