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.

The small firm, which specialises in group tours largely for Chinese clients, is at the sharp end of a backlash that threatens to deal a sizeable blow to Japan's economy, the world's fourth largest.

The travel warning - triggered by Japanese Prime Minister Sanae Takaichi's remarks about Taiwan, the democratically governed island claimed by China - has seen a wave of flight cancellations and battered tourism-related stocks in Japan.

"This is a huge loss for us," said Yu Jinxin, vice president of East Japan International Travel Service.

Tourism accounts for around 7% of Ja

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