[Oberon]

This has been going on for about two months now, if not longer, and it boils down primarily to the Senkaku islands. Now, anyone who thinks only the Muslims get nutjobs in power should take a look at Tokyos current mayor, Ishihara, who has had such memorable quotes as:

"old women who live after they have lost their reproductive function are useless and are committing a sin"

"Roppongi is now virtually a foreign neighborhood. Africans — I don't mean African-Americans — who don't speak English are there doing who knows what. This is leading to new forms of crime such as car theft. We should be letting in people who are intelligent."

(In regards to Korean comfort women) "Where is the proof that Japanese forced them to do this? It was an era of poverty, these women grudgingly turned to the only trade they could make money in, prostitution.”

He also announced plans whilst in the US to buy the Senkaku islands for Tokyo (thankfully it seems that fell through), and then, perhaps inspired by Ishihara, a group of 'Taiwanese' raised the PRC flag whilst near the islands and escorted by Taiwanese coast guard vessels which then had a few close quarter maneuvers with Japanese coast guard vessels as the latter tried to board the protestors boat and failed.
The next month another group of Chinese from Hong Kong landed on the island, threw bricks as Japanese coast guard vessels that came near them and raised the flags of both the PRC and ROC. They were arrested by Japan, but deported without charge back to Hong Kong where they received a heroes welcome.
Angered by the Japanese governments refusal to charge the Chinese protesters, a group of Japanese organised a small flotilla which sailed near the islands to commemorate the Japanese dead from WWII, whilst they were there a group of Japanese swum ashore and hoisted the Japanese flag there. That promptly set off anti-Japanese protests in about twenty-five Chinese cities that have been going on since August and are, if not encouraged by, certainly not prevented by the Chinese government.
There have been similar protests but in a smaller scale in Japan, but it's not likely to come to an armed conflict any time soon, just the continuation of the status quo, protests, stunts and fishing vessel rammings.