Japanese retailers wrestle with Chinese tourist boycott

Japanese retailers face severe revenue declines as Chinese tourist boycotts escalate in early 2026, with luxury brands and department stores reporting up to 40% drops in sales from pre-2024 levels. The boycott stems from geopolitical tensions, including disputes over territorial claims and trade restrictions, prompting Chinese consumers to avoid Japanese goods and travel destinations entirely. Major retailers like Takashimaya and Mitsukoshi are cutting staff and reducing inventory, while smaller businesses in Tokyo’s Ginza and Osaka’s Namba districts risk closure without recovery. Government officials are negotiating with Chinese counterparts to ease tensions, but analysts warn the economic impact may persist through 2026, worsening Japan’s post-pandemic retail slump. Tourism-dependent sectors, including hotels and duty-free shops, are lobbying for emergency subsidies as visitor numbers from China—once 30% of inbound tourism—plummet to historic lows.