An off-the-cuff remark by new Prime Minister Sanae Takaichi that triggered Japan's biggest bust-up in years with powerful neighbour China was not meant to signal a new hardline stance.

China stepped up its economic war with Japan on Wednesday as a dispute between Asia’s two biggest economies intensified over a remark by Tokyo's new leader about a Japanese response to any Chinese military move against self-ruled 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.

Less than a month into her term, Japan's conservative leader has stirred tensions with China by suggesting a Chinese move against Taiwan could prompt a Japanese military response.

Beijing is flexing its military and economic might to show its displeasure with the Japanese leader’s comments about defending Taiwan. But its aggressive approach risks backfiring.

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

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.

Shares in Japan’s tourism-related companies fell sharply after China called on its citizens to avoid traveling to the country.