Japan is keeping an eye on Hong Kong to see how the implementation of China's national security law for the territory will affect its democracy and Japanese business activity there.
China's top legislative body enacted the national security law on Tuesday to crack down on anti-government protests.
Japan's Foreign Minister Motegi Toshimitsu expressed regret over the move. He said the law harms trust in the "one country, two systems" principle.
Defense Minister Kono Taro told reporters that China's move would have a grave impact on the planned state visit to Japan by Chinese President Xi Jinping, which has been postponed amid the coronavirus pandemic.
About 26,000 Japanese nationals are living in Hong Kong, and 1,400 companies from the country are operating there.
The United States announced a decision to suspend exports of defense equipment to Hong Kong.
But Japan is cautious about imposing sanctions against China. Japan plans to cooperate with other Group of Seven nations to urge China to make sure business rights and activities are protected, and the freedom and rights of Hong Kong citizens are respected.