Published on 01/07/2026 at 02:08 am EST
(MT Newswires) -- Japanese shares ended lower on Wednesday after the country criticized China's ban on exports of dual-use items as unacceptable, heightening diplomatic tensions between the two countries.
The Nikkei 225 fell 1.1%, or 556.10 points, to close at 51,961.98.
Dual-use items include goods, software and technologies with civilian and military uses, such as rare earths used in drones and chips.
The dispute began late last year after Prime Minister Sanae Takaichi said a Chinese attack on Taiwan could pose an existential threat to Japan, comments Beijing has demanded she retract. China followed with countermeasures, including a ban on exports of dual-use items for military use.
Chief Cabinet Secretary Minoru Kihara said the move, which singles out Japan, was unacceptable and regrettable, adding that the impact on Japanese industry remains unclear.
In economic news, Japan's service sector growth slowed in December, with the Services PMI falling to 51.6 from 53.2, the weakest expansion since May, S&P Global said.
New orders eased, though export demand returned to growth, while hiring rose at the fastest pace in over two-and-a-half years. The Composite PMI slipped to a seven-month low of 51.1 as services cooled and manufacturing stalled.
On the corporate front, Toyota Motor slid 2.9% after reports that the carmaker is pressing ahead with engine and hybrid development despite China's rapid shift to EVs, betting on varied drivetrain demand across markets, Nikkei said.
The automaker plans a V8-powered hybrid GR GT around 2027, is investing up to $10 billion to expand U.S. hybrid production, and is developing China-specific EVs with local partners.
Separately, Mizuno ended 5.6% higher after the company said it will begin producing baseballs in Cambodia in June, opening a factory near Phnom Penh with about 200 workers and an annual output of roughly 1.2 million balls.

Sumber : MT Newswires