More Japanese companies may relocate away from the UK in the coming months if Britain does not seal a promising post-Brexit deal, the Japanese ambassador has warned.

In an exclusive interview with Sky News, Koji Tsuruoka said Japanese companies had been cutting back on investment in the UK amid the uncertainty.

However, he added that it would not take a long time to arrange a post-Brexit trade deal between the UK and Japan.

Mr Tsuruoka's comments come weeks after Sky News revealed that both Nissan and Honda would be cutting back production in the UK, in Honda's case shutting down its Swindon factory altogether.

Although both companies emphasised that neither decision was due to Brexit, Mr Tsuruoka said many of Japan's 1,000 or so UK-based companies were now considering how to adapt to post-Brexit life.


"These are all global companies and therefore they have other possibilities other than staying," said Mr Tsuruoka.

"They may relocate. Or they may combine or consolidate. But you can't make those decisions until you know what's going to happen next. This is very important.

"Most of these companies would like to expand their capacity. But they need to know about the UK-EU economic relationship.

"Many of those possible potential investments are being put on hold right now because they can't really convince investors that these are the right investments today.

"That's why the uncertainty of not having some kind of informed future perspective makes it very difficult for new investment."

Image: Koji Tsuruoka's comments come weeks after Sky News revealed Honda would be shutting down its Swindon factory

Asked whether Japanese people were worried about the state of the Brexit negotiations, Mr Tsuruoka, who became ambassador a few weeks before the vote, said: "Worried is not the right term; the right term is perplexed.

"They would like to know what's happening. And it's difficult to understand what's happening and where it will lead. They are asking questions and are not able to find satisfactory answers."

One of the reasons some have cited for Japanese car companies moving production away from the UK is that Japan now benefits from lower tariffs on exports to the EU through the EU-Japan trade deal.

Mr Tsuruoka, who previously worked on the negotiation of the Trans-Pacific Partnership, a complex trade deal between countries on the Pacific rim, said he was optimistic a trade deal could be agreed between the UK and Japan which would not take long to negotiate.

He added that the UK was welcome to join the pacific trade pact, CTTPP, as it is now called, but that a bilateral trade deal with Japan would likely be agreed sooner.