‘Tokyo Sent Strong Message to UK’: Brexit-Wary Japanese Firms Moving Out of UK

The United Kingdom may see Japanese firms move their head offices out of the country due to Britain’s decision to leave the European Union. Radio Sputnik discussed the issue with Dr. Janet Hunter, a Professor of Economic History at the London School of Economics.

“Japan’s decision to speak out is something we should pay attention to. It really indicates that they are deeply worried about the potential impact [of Brexit] on Japanese investments in the UK. This is really bad news for Japanese investors as well as other investors who really focus on investing in Britain,” Janet Hunter said.

She mentioned the large number of people employed by Japanese companies in Britain and said that London would certainly hate to see all these jobs moving to other parts of the EU.

“After Britain voted to leave the EU, a lot of other companies from various places around the world started saying they would leave the City of London. But the Japanese have a different culture and their decision to move out has sent a very strong message to the UK,” Janet Hunter warned.

When asked if there would be negotiations to suit both sides, Dr. Hunter said that her feeling was that it was exactly what is going to happen.

“Traditionally, Japan has had very close relations with Britain, both economic and political, and I think that [even those in the British government who campaigned for Brexit] are very cognizant of the potential implications of production and financial companies moving out and they will do their best to avoid that.”

Article 50, the formal mechanism for leaving the EU, hasn’t been triggered yet and some in Britain say that there is no cause for panic because it is going to be two years before this mechanism is triggered and lots of things may happen in that time. This includes lots of negotiations, which could suit everybody.

“I think that the vast majority of people who want to avoid a panic and that Prime Minister Theresa May is sending a clear message that we need to do a lot of talking before we trigger Article 50 and, aware of the implication of this,  we have to try our best to [find mutually acceptable solutions]. Yet, I don’t think that anybody knows what will come out of this,” she said in conclusion.

Japanese firms employ nearly 140 thousand workers in Britain. Half of Tokyo’s investment in the EU comes to the UK, including by companies like Daiwa, Hitachi, Honda, Mitsubishi, Nissan Nomura and Toyota. 

Ahead of the June 23 referendum on Britain’s membership in the EU, Japanese firms and the country’s Prime Minister Shinzo Abe warned that Japanese investments in the UK would fall if the country decided to leave the European Union.