Representatives of the Japanese government and the Bank of Japan are set to hold an emergency meeting on Saturday to analyse the economic impact of Britain’s exit from the European Union (EU).
The focus of the meeting will be, in addition to the impact that UK’s exit from the EU will have on the global economy, the negative effects on the yen and on important interests of many Japanese companies in British territory, public broadcaster NHK reported.
The meeting comes a day after Britain opted for ‘Leave’ in the referendum causing the Tokyo Stock Exchange to experience its worst drop in percentage terms in more than two years with the yen at its highest against the dollar and euro since late 2013 and 2012 respectively.
An expensive yen undermines the competitiveness of the large Japanese exporting companies, who also tend to see their profits cut once they were repatriated.
Britain’s exit complicates, in addition, the Free Trade Agreement that Tokyo soon hoped to sign with Brussels and which is an important tool for the current Japanese government to push for structural reforms that deregulate and make the world’s third largest economy more competitive.
Ministry of Economy members will hold a meeting next week with Japanese business leaders to discuss possible future problems that they may face on British and European soil, reported NHK.
With more than 1,300 companies in the country, Japan is the second largest foreign investor in the UK, behind the US, and Britain’s exit from the community bloc greatly affects these companies which are likely to lose direct access to the EU market.