Japanese firms, shops close in fear of protests

Major Japanese firms shut factories in China yesterday and urged their nationals in the country to stay indoors today ahead of what could be more angry protests.

Today is the anniversary of Japan's 1931 occupation of the northeastern parts of China, a date Tokyo fears could trigger another outbreak of anti-Japan sentiment.

China's worst outbreak of anti-Japan sentiment in decades led to weekend demonstrations and violent attacks on well-known Japanese businesses such as carmakers Toyota and Honda, forcing frightened Japanese into hiding and prompting Chinese media to warn that trade relations could now be in jeopardy.

Toyota Motor Corp and Honda Motor Co said "arsonists" had badly damaged their stores in the eastern port city of Qingdao at the weekend.

However, Toyota said its factories and offices were operating as normal yesterday and that it had not ordered home its Japanese employees in China.

Honda will suspend production in China today and tomorrow.

Japan's Fast Retailing said it will close more of its Uniqlo clothing stores in China today as it expects anti-Japan demonstrations to escalate.

Asia's largest apparel retailer said it will close 19 Uniqlo outlets in China, up from seven yesterday. One store will open for a limited time, compared to nine yesterday.

Japan's top general retailer, Seven & I Holdings, said it would close 13 Ito Yokado supermarkets and 198 7-11 convenience stores today.

Sony Corp is discouraging travel to China.

Mazda Motor Corp will halt production at its Nanjing factory, which it operates with Chongqing Changan Automobile Co Ltd and Ford Motor Co, for four days.

Panasonic said one of its plants had been sabotaged by Chinese workers and would remain closed today.

Electronics firm Canon Inc will stop production at three of its four Chinese factories, while All Nippon Airways Co reported a rise in cancellations on Japan-bound flights from China.

The dispute also hit shares of Hong Kong-listed Japanese retailers, with department store operator Aeon Stores (Hong Kong) Co Ltd falling to a seven-month low yesterday.

"All Japan-related shares are under selling pressure," said Andrew To, a research director from Emperor Capital.

Japan has warned its citizens about large-scale protests in China today and many Japanese schools across China have canceled classes this week.

The overseas edition of the People's Daily warned that China could resort to economic retaliation if the dispute festers.

"How could it be that Japan wants another lost decade, and could even be prepared to go back by two decades?" asked a front-page editorial.

China "has always been extremely cautious about playing the economic card," it said.

"But in struggles concerning territorial sovereignty, if Japan continues its provocations, then China will take up the battle," the editorial said.