Japan Department Store Profit Forecast 2026 Drops 24% as Tensions Rise

Japanese retail giants are bracing for a massive chill. According to Nikkei on January 17, 2026, the country's six major department stores anticipate a combined 24% plunge in operating profit for the December-February period. The primary culprit? A sharp disappearance of high-spending tourists from China.

Analyzing the Japan Department Store Profit Forecast 2026 Slump

The diplomatic friction between Tokyo and Beijing has hit the cash registers hard. After Beijing issued warnings against traveling to Japan, Chinese airlines slashed over 900 flights. This geopolitical headwind is expected to drag down total foreign visitor numbers by 3% in 2026, with many observers predicting the downturn will persist throughout the year.

A Tale of Two Retailers: Domestic vs Global

While department stores suffer, global-facing brands are telling a different story. Fast Retailing, the operator of Uniqlo, recently saw its market cap soar to $126 billion thanks to an overseas boom. The contrast is clear: companies with diversified global footprints are weathering the geopolitical storm much better than those tied to domestic luxury tourism.