Major Japanese firms including Canon and Honda suspended operations at several plants in China, officials and reports said Monday, on the eve of an expected fresh wave of anti-Japan demonstrations.

Beijing and Tokyo, the world's second and third-largest economies, are at loggerheads over disputed islands, prompting US Defense Secretary Leon Panetta to express Washington's concern over the demonstrations and the conflict.

After meetings in Tokyo with senior Japanese officials, Panetta -- who later travelled on to Beijing -- urged "calm and restraint on all sides", a day after warning "misjudgment on one side or the other could result in violence".

Panetta, in a three-day visit to China, was due to deliver his appeal to the country's top civilian and military figures, including the Chinese leader-in-waiting, Vice President Xi Jinping.

Widespread anti-Japanese protests, some of them violent, have been held across China in recent days over the East China Sea islands known as Diaoyu by Beijing and Senkaku by Tokyo. They are claimed by both but controlled by Japan.

A new bout of demonstrations is expected on Tuesday, the anniversary of the 1931 "Mukden incident" that led to Japan's invasion of Manchuria, which is commemorated every year in China.

China and Japan have close trade and business ties, with numerous Japanese companies investing in their larger neighbour and two-way trade totalling $342.9 billion last year, according to Chinese figures.

But the two countries' political relationship is often tense due to the territorial dispute and Chinese resentment over past conflicts and atrocities.

Camera and computer printer maker Canon said it had suspended operations at three plants in southern and eastern China for Monday and Tuesday "to ensure the safety of all of our employees working there".

Panasonic said it was halting work at a factory in Qingdao in northeast China "for the time being" after a fire.

Honda Motor and Mazda Motor both announced a halt to operations at their auto assembly plants in China, the Kyodo News agency said.

Honda will suspend operations at its five vehicle assembly plants on Tuesday and Wednesday, company officials were quoting as saying, saying the move was aimed at adjusting shipments.

Mazda plans to close its vehicle assembly plant in Nanjing until Friday, Mazda officials said.

China is Japan's biggest trading partner and the stoppages came as the ruling Communist Party's mouthpiece warned Japan's economy could suffer for up to 20 years if Beijing chose to impose sanctions over the territorial row.

A financial spat between the countries could cast a pall over growth on the continent, which the West is counting on to drive recovery from the global slowdown.

The row over the islands intensified last week when the Japanese government bought three of them, effectively nationalising them, and China responded by sending patrol ships to nearby waters.

According to the Kyodo news agency, Japanese Prime Minister Yoshihiko Noda on Monday told national broadcaster NHK: "We need to take a cool-headed approach to avoid negative impacts on overall (relations).

"Japan will try (to exercise restraint), and we need to strongly call on China for restraint."

The US has a mutual defence treaty with Japan and Panetta told reporters earlier in the day in Tokyo that Washington's commitment to the arrangement was unwavering.

"Obviously we stand by our treaty obligations. They are longstanding, and that does not change," he said.

But he added that the United States as a matter of policy does not take a position on the territorial dispute.

"It's in everybody's interest for Japan and China to maintain good relations and to find a way to avoid further escalation," he said, pounding a podium for emphasis.

In Beijing, about 100 protesters in two groups gathered at the Japanese embassy amid heavy security, marching back and forth past the building and occasionally throwing water bottles at it, while a helicopter buzzed overhead.

The embassy urged its citizens to take safety precautions including not going out alone and not speaking loudly in Japanese, consular official Keiji Kamei told AFP.

A commentary in the People's Daily newspaper on the possibility of economic sanctions said: "Amidst a struggle that touches on territorial sovereignty, if Japan continues its provocations China will inevitably take on the fight."

Shares of Chinese companies with business ties to Japanese firms fell in trading in Shanghai as investors sold on worries that the territorial dispute could hurt demand for their products.