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.

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.

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

China’s benchmark bond yield is poised to fall below Japan’s, a historic crossover that may reignite fears the world’s No. 2 economy is sliding into the deflationary spiral that paralyzed its neighbor in the 1990s.

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.

China has intensified its economic pressure on Japan, with state-owned enterprises banning employees from travelling to its Asian neighbour, tour groups and a flagship forum being cancelled and Japanese film releases suspended.

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.

Takaichi, a hardline conservative who was approved by parliament as Japan's first female prime minister last week, is a regular visitor to Tokyo's Yasukuni shrine, which honours Japan's war dead, including soldiers and officials convicted of war crimes by an international tribunal.