The row erupted after Prime Minister Sanae Takaichi told Japanese lawmakers that a Chinese attack on Taiwan could threaten Japan's survival and potentially trigger a military response, something officials had long avoided airing in public for fear of provoking Beijing, which claims the self-ruled island.

Japanese tourism and travel-related stocks slumped Monday after Beijing warned its citizens against traveling to and studying in Japan amid a deepening diplomatic spat between the nations.

Also in today’s newsletter, foreign investors return to Chinese stocks, and Gazprom forges ahead with China pipeline

Asia-Pacific markets were set to open lower on Monday as investors look toward a slate of economic data in the region.

China sent Coast Guard ships near disputed islands and warned travelers and students about safety risks in Japan. The escalation is over comments on Taiwan by Japan’s new prime minister.