JAL shares hit as tensions escalate
Japan Airlines, which returned to the Tokyo stock exchange last week, declined to a record low as tour groups cancelled China flights because of a territorial dispute between the two countries.
JAL dropped as much as 7.9 per cent to 3,425 yen, its second decline in three days. That's 9.6 per cent below the 3,790 yen initial public offering price. The carrier was at 3,475 yen as of 2.11 pm.
All Nippon Airways fell as much as 1.1 per cent. The two Tokyo-based airlines have had a combined 52,500 China seats cancelled through the end of November amid rising tensions caused by a spat over islands in the East China Sea.
Chinese and Taiwanese vessels were today in waters near the islands, according to Japan's Coast Guard.
"Reports of Taiwanese ships approaching the islands disputed by Japan and China are likely to spur more cancellations," said Minoru Matsuno, president of Value Search Asset Management, a Tokyo-based investment advisory firm.
"JAL shares are reacting more than ANA given the large placement of stock" last week, he said.
The coast guard said as many as 50 Taiwanese fishing boats and patrol vessels left waters administered by Japan after it fired water cannons at them.
The islands, known as Senkaku in Japanese and Diaoyu in Chinese, are also claimed by Taiwan. Diplomats from China and Japan are meeting today.
JAL had 15,500 cancellations as of yesterday, spokesman Taro Namba said today. ANA had about 37,000 cancellations as of September 21, said Megumi Tezuka, a spokeswoman. The figures cover group reservations.