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Chinese demonstrators stage an anti-Japanese protest over the disputed Diaoyu Islands, known as the Senkaku Islands in Japan, outside the Japanese Embassy on September 15, 2012 in Beijing, China. - 

Tensions are on the rise this week between China and Japan after Chinese naval ships confronted Japanese fishing boats in the waters surrounding some disputed islands in the East China Sea.

It may sound like a distant squabble, but the ongoing conflict has economic impacts as far away as the U.S.

BBC reporter Rupert Wingfield-Hayes joins Marketplace Morning Report host Jeremy Hobson from Tokyo with the details.