The japs are determined to breach Chinese red lines on this.
They’ve seen China give a lot of “final warnings” over the years on multiple issues to multiple countries resulting in nothing substantial politically. They understand the possible economic consequences, but believe any measures will be temporary, like China’s methods on Australia, Canada, etc. The lack of punishment on Netherlands probably reinforced their view. They are willing to trade short term economic pain for a permanent national re-arm and deployment of missiles close to China.
They believe China will ultimately choose economic stability over any military action. They’re probably right.