Japan’s firms will not rush to exit the United Kingdom

Subject

Impact of Brexit on Japanese investment into the United Kingdom.

Significance

Japanese firms are confronting their options by moving their official office locations to EU countries and changing the nationality of their finances. The reactions so far have been limited and largely defensive.

Impacts

• Frankfurt, Amsterdam and Paris will benefit from London-based financial firms relocating, though the scale of movement will be small.
• Pressure will grow in the United Kingdom for a trade agreement with Japan to balance the new agreement that Japan has with the EU.
• Slowing European and UK demand for cars will intensify the forces driving Japanese carmakers to consider leaving the United Kingdom.