Duty-free sales at Japanese premium fashion and lifestyle retailer Matsuya Co.’s flagship Ginza stores fell about 15% last month from a year earlier, marking the first sign that Japan’s retail sector is being hit by geopolitical tensions with China.

Although local sales at Ginza stores rose 9.5% in November, it wasn’t enough to prevent overall revenue from slipping 1.2%, the company said in a statement Monday. Sales at its Asakusa outlet dropped 23%.

The slump in inbound spending underscores how diplomatic tensions between China and Japan since mid-November are weighing on retail sales. Beijing’s travel warning triggered nearly half a million cancellations of Japan-bound air tickets by Chinese airlines in just three days. Tour groups also scrapped pre-booked trips and hotel stays.

The f

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