Tokyo stock prices have tumbled amid fears about the economic fallout from China’s intensifying diplomatic and street protests targeting Japan as bilateral relations sour to their worst state in decades.

Analysts say Japanese companies, many of which are counting on China’s booming economy to drive profits, aren’t taking the anti-Japan sentiment and unrest seriously enough — a concern investors appear to share. The benchmark Nikkei average plunged 3.8 percent Monday to end at its lowest point since Dec. 16.

Some of the most noticeable declines were in companies with business in or tied to the Chinese and U.S. markets.

On Saturday, Chinese police stood by as thousands of rioters threw stones, eggs and plastic bottles at the Japanese Consulate in Shanghai, and damaged Japanese restaurants and cars. Some demonstrators shouted “Kill the Japanese!”

It was the third consecutive weekend of protests and vandalism in the most contentious dispute between the two countries in decades. In Beijing last weekend, rioters smashed windows at the Japanese Embassy and attacked at least two Japanese students.

The Chinese are angry about several issues — a new textbook that critics say glosses over Japan’s wartime atrocities, Japan’s bid to win a permanent seat in the U.N. Security Council and Prime Minister Junichiro Koizumi’s visits to Yasukuni Shrine, which honors war criminals.

“The situation is very dangerous,” said Susumu Yabuki, an honorary professor of China studies at Yokohama City University. “Japanese businesses are clueless about the situation, and that makes it even more dangerous.”

Before, the common wisdom about China-Japan relations was that political tensions might simmer, but the hard feelings would not spread to business because both nations recognize they have so much to gain by boosting economic ties. Last year, China surpassed the United States as Japan’s biggest trade partner.

But now the anger has become so volatile, political concerns could take precedence over economics, Yabuki said.

On Monday, Japanese and Chinese government officials blamed each other for the situation and demanded apologies — although there was talk of a weekend summit between the country’s leaders to defuse the situation.

Japanese companies have been generally mum, brushing off fears about long-term damage to their business.

“It’s business as usual,” said Koichi Mabuchi, spokesman for Isuzu Motors Ltd.

The automaker was targeted in a recent boycott of Japanese goods organized by Chinese chain stores because of a former Isuzu president’s association with a conservative group linked with the contested textbook.

Other automakers, including Toyota Motor Corp., Nissan Motor Co. and Mazda Motor Corp., which are all expanding business in China, also said their sales haven’t been affected. And they said their plans to take part in the Shanghai auto show this week haven’t changed.

Honda Motor Co. was one exception. President Takeo Fukui said earlier this month his company was cutting back on business trips to China and taking other precautions so their workers don’t stand out during risky times.

There are plenty of other signs of Chinese anger being directed at Japanese businesses.

Last week, Sony’s China Web page was attacked by hackers who posted anti-Japan messages. The Tokyo-based electronics maker said its sales and other business in China were unaffected.

Two stores in China operated by supermarket chain Aeon Co. had to be shut down Sunday because of the demonstrations, and people were kicking over garbage cans and scrawling graffiti over signs, according to Aeon.

In recent weeks, Asahi Breweries Ltd. beer has been removed from some store shelves in China, but the company said it was too early to assess overall damage to sales.

Chinese outrage won’t go away until more Japanese become aware of wartime wrongdoing and put in a sincere effort toward atonement, said Hikotaro Ando, an honorary professor at Waseda University in Tokyo.

Memories of wartime atrocities have been passed down in Chinese families, and bitter feelings run deep because many Chinese have a relative who was killed, injured or raped by Japanese soldiers, Ando said.

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