The volume of Japan’s exports to China is predicted to shrink by one trillion yen a year in the wake of a territorial dispute between the two countries over a group of islands in the East China Sea.

Japan’s newspaper the Sankei Shimbun made the prediction, citing a report released by Daiwa Institute of Research. The daily said the anticipated fall in exports will equate to eight percent of total shipments Japan sent to China last year.

Sankei predicted that Japan’s gross domestic production will also decrease by 820 billion yen a year, adding that the territorial row with China will have bigger economic shocks on Japan than expected, given a drop in the number of Chinese tourists to Japan.

Another Japanese daily, the Nihon Keizai Shimbun, also forecast that the territorial dispute between Japan and China could raise risks in the global financial market.