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Economic growth

UK and Japan Strengthen Economic Ties with New Partnership Agreement

Strategic Insights

— 2 min read

The UK and Japan have strengthened their economic ties by signing a Memorandum of Cooperation (MoC) aimed at enabling increased UK investment into Japan. The agreement was signed at the British Embassy in Tokyo by Baroness Poppy Gustafsson of Chesterton CBE, UK Minister for Investment, and Mr. Seto Takakazu, State Minister of the Cabinet Office of Japan. This strategic partnership establishes a formal framework for collaboration to accelerate UK investment into Japan, supporting Prime Minister Ishiba's ambitious target of more than doubling Japan's foreign direct investment stocks to JPY120 trillion (approximately £600 billion) in 2030.

Key Takeaways:

  • The UK and Japan have signed a Memorandum of Cooperation (MoC) aimed at enabling increased UK investment into Japan.
  • The agreement supports Prime Minister Ishiba's ambitious target of more than doubling Japan's foreign direct investment stocks to JPY120 trillion (approximately £600 billion) in 2030.
  • Key growth sectors with strong potential for increased UK investment include clean energy, digital transformation, biotechnology and healthcare, alongside enabling sectors such as legal, professional and financial services.
  • The MoC builds upon the foundation of the enhanced global strategic partnership outlined in the Hiroshima Accord of May 2023 and complements existing frameworks such as the UK-Japan Comprehensive Economic Partnership Agreement (CEPA) and both nations' membership of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
  • To mark the occasion, the British Embassy in Tokyo has launched "Expand in Japan" -- an initiative to champion and support UK investors seeking opportunities in the Japanese market.
  • UK companies in Japan already create high-quality jobs, develop deep partnerships, and offer world-leading products, services and solutions to multiple sectors in the market.
  • Nearly 1,000 Japanese companies have already established operations in the UK, with £87 billion in investment stock.
  • The agreement aims to strengthen reciprocal investment flows, supporting both nations' economic growth and security objectives.

Statistics:

  • JPY120 trillion (approximately £600 billion) - Japan's foreign direct investment stocks target in 2030
  • £600 billion - Equivalent value of Japan's foreign direct investment stocks target in 2030
  • £87 billion - Investment stock of UK companies in Japan
  • 1,000 - Number of Japanese companies with operations in the UK
  • £87 billion - Investment stock of nearly 1,000 Japanese companies in the UK
  • 2030 - Year by which Japan aims to double its foreign direct investment stocks
  • May 2023 - Month and year when the Hiroshima Accord was signed
  • 2023 - Year when the UK-Japan Comprehensive Economic Partnership Agreement (CEPA) was signed
  • 2024 - Year when the UK acceded to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP)
  • 2025 - Year when the Economic 2+2 was launched

Sources:

  • British Embassy Tokyo
  • UK Government
  • Baroness Poppy Gustafsson of Chesterton CBE, UK Minister for Investment
  • Mr. Seto Takakazu, State Minister of the Cabinet Office of Japan
  • The Hiroshima Accord of May 2023
  • UK-Japan Comprehensive Economic Partnership Agreement (CEPA)
  • Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP)
  • The Economic 2+2 of 2025

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