The new leadership of China and Japan is likely to take steps to de-escalate tensions over the Diaoyu Islands and to prevent relations from spiraling further downward, leading experts said in Davos, Switzerland.

The leadership succession in the two countries could have the potential to "make a great deal of difference" over the islands issue as the new leaders may pursue a different approach than their predecessors, said Yoichi Funabashi, chairman of the Rebuild Japan Initiative Foundation on the sideline of the World Economic Forum.

"I am cautiously optimistic that there is a chance for the political leaders to change the mode and the mood of tension in the region," he said.