The film was set to begin its theatrical run on April 12 at Shinjuku's ultramodern Wald 9 multiplex through distributor Argo Pictures.
The cancellation follows an increasing number of threats toward Li and his production company Dragon Films that began earlier this year when local publicity activities began. Death threats from right wing groups prompted a move of the Dragon Films premises.
'The judgment was made based on the possibility of problems arising, including [problems arising] for neighbouring tenants in the building complex,' stated a T-Joy representative.
A spokesperson at Argo Pictures commented on T-Joy's decision: 'It's very rare for a film this independent to be screened at a multiplex of that size, so it's very disappointing. I hope this trend of self-censorship of screenings doesn't spread.'
Three other cinemas in Tokyo and one in Osaka are still set to screen the film, but the high profile Wald 9 cancellation has created considerable negative publicity. The film's official web-site has been temporarily taken down.
In an unusual move, T-Joy screened Yasukuni for approximately 80 members of the Liberal Democratic Party last Wednesday to determine whether the government-managed Japan Arts Council subsidy of $77,000 (Y7.5m) was misappropriated in the making of a film that could be seen as 'anti-Japan.'
Ten years in the making, the meticulously researched film examines the history and current debate surrounding Yasukuni Shrine, where the spirits of Japan 's 2.47 million war dead are enshrined. Included in the list of souls are the names of over 1,000 soldiers convicted of war crimes, including Class-A convicted war criminals such as General Hideki Tojo. The film also captures the shrine's last remaining sword smith creating his final blade, considered a physical embodiment of the shrine.
Veteran documentarian Li, whose career began in China in the 1980s, won the Netpac Prize for Asian cinema at the Berlin International Film Festival in 2000 for his documentary 2H, about a former Kuomintang general living in Tokyo.
Yasukuni has been programmed at a string of important festivals, including last year's Pusan International Film Festival, where it sold to several territories, Berlin's Forum sidebar, Sundance and the in-progress HKIFF (March 17-April 6).