Asia and Oceania

Japan
Last reviewed: 17 October 2008

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UK/Japan Trade and Investment

There are over 1,400 Japanese investors in the UK. Of these, about 240 are engaged in manufacturing, 160 Japanese companies have R&D operations, and 74 have European headquarters in the UK. UKTI recorded 84 new investments from Japan in 2005/6, second only to the number from the US, and these investments created or safeguarded over 2,000 jobs. The UK has the largest amount of Japanese FDI in Europe, about 20% of the total. The UK remains successful in attracting Japanese investment across a range of industries in high-value added manufacturing, research and development, regional headquarters, and European marketing functions. The automotive sector is largest in terms of manufacturing employment and capital expenditure, but the ICT and biopharma/healthcare sectors are also significant sources of investment.

Japan is the UK's largest export market after Europe and the US, and Britain is Japan's ninth largest market, with tourism (60,000 visitors per year) and financial services bringing our balance of trade with them into surplus. The UK exported about 3.8b of goods and £5bn in services to Japan in 2003.

Main UK exports to Japan include chemicals, pharmaceuticals, automotive components and cars, electrical machinery and scientific instruments. UK companies that have made significant investments in Japan include Vodafone, Cable and Wireless, Astra Zeneca, GSK, Tesco, GKN. British retailers with a presence in Japan include Virgin, HMV, Body Shop, Burberry. Toyota motors now build their Avensis model in Britain and re-export it to Japan. . A number of law firms have also opened offices in Japan including Allen & Overy, Linklaters, Freshfields and Clifford Chance.

The Japanese market has become more open during the 1990s, as 'cost down' pressures and more competitive global markets encouraged Japanese companies to look overseas for products, technology, design and services. Deflation since the bursting of the economic bubble in Japan in 1989 has brought down rents and salaries. Japan is still a relatively expensive and time-consuming market to do business. But succeeding in Japan can enhance companies' global competitive position, and bring significant profit and technology advantages.

UKTI supports exports and investment into Japan through a range of services, including market research, missions and trade fair grants. UKTI has over 50 specialist staff in Tokyo and Osaka. New investors can take advantage of high quality, low cost serviced offices at the British Industry Centre in Yokohama (run by the British Chamber), and services provided by the Japanese Government through JETRO.