Flare up could send RE prices soaring

Japan says:

On Tuesday, the Yomiuri newspaper reported that the Japanese government is to reinforce its efforts to keep Chinese ships at arm's length and that it will no longer grant passage to Chinese naval vessels that enter Japanese territorial waters, which extend just over 13 miles from the Senkaku Islands.

source:-

copyright link/news/worldnews/asia/china/12094180/Japan-accuses-China-of-sending-disguised-warship-into-its-waters.html
__________________

China says:

Chinese Foreign Ministry spokesman Hong Lei, ............ said China was determined to protect its territory, repeating its standard line that the islands had been Chinese "since ancient times".

The official China Daily reported on Tuesday China's coastguard was preparing to launch a new, large, armed vessel, which could be assigned to cover the South China Sea, where China has territorial disputes with several Southeast Asian neighbors.

The 12,000 ton ship will be armed with one 76-mm cannon and anti-aircraft guns, the newspaper said. Most Chinese coastguard ships are unarmed or only have water cannons.

The ship, along with a sister vessel also yet to enter service, are larger than two Japanese coastguard vessels which are the world's largest active coastguard ships, the newspaper added.

source:

http://mobile.reuters.com/article/idUSKCN0UQ06F20160112