Japan’s financial sector has “concerns” about Britain’s exit from the European Union, Philip Hammond said on Thursday after he sought to reassure the country’s banks that London was striving to guarantee them “maximum possible access” to EU markets post-Brexit.



The chancellor, who is in Japan to meet government officials and business leaders, said he had been “seeking to engage with Japanese businesses, particularly in the financial services sector, about the challenges and opportunities” presented by Brexit.

“We’ve been clear that we will seek maximum possible access to European markets on a reciprocal basis for our firms in terms of goods and services,” he said.

Hammond, who will travel to South Korea on Friday, said he had told them that controls on European migration would not mean “choking off” the supply of highly skilled workers.



“I repeated that we will introduce a migration control regime between the UK and the EU, but that is not the same as saying we will cut off migration from the European Union,” he said.

“I can’t conceive of any circumstances in which we wouldn’t allow highly skilled, well-paid people with employment to come to the UK to work in these international businesses.

“I hope I have been able to reassure them today that we understand their concerns and that we will be putting a priority on addressing those concerns in our negotiations with the European Union.”

Before the referendum, several major Japanese companies warned that a victory for the Brexit campaign could have a negative impact on their investments in Britain.



More than 1,000 Japanese firms have a presence in the UK, employing about 140,000 people in manufacturing, pharmaceuticals and financial services.

Kazuya Kobayashi, managing executive officer of Mizuho Bank, recently voiced concern over the possible withdrawal of Britain’s “EU passport”, which enables banks based in London to operate freely across Europe’s financial markets while retaining most of their staff and operations in the capital.

“We are concerned about the future of the passport system after Brexit,” Kobayashi told a forum in Tokyo. “At the moment we can’t imagine a post-Brexit state of play. In that respect, the EU banking passport’s future is our biggest headache.”

Last month, the governor of the Bank of England, Mark Carney, warned that European economies could be damaged if their access to the City of London were disrupted after Britain leaves the EU.

Hammond has suggested the government will seek a transitional deal to smooth the Brexit process and to avoid disruption to Britain’s financial stability.

Asked if he and Carney were now the poster boys for “soft” Brexit, Hammond said: “We don’t recognise this soft and hard Brexit terminology. It’s far too simplistic. This is going to be a long and complex negotiation.

“Both sides have vital interests that they have to defend, and we will be exploring how to optimise a solution which allows us to go on trading closely together, allows us to go on collaborating in areas like science and technology, and security and defence for the good of all the people of Europe, but which also recognises the political message that we’ve had from the British people.”