The UK has earned Japan’s respect – let’s use it to build our economy
Japan holds a deep respect for the UK and is eager to strengthen our relationship further, writes Chris Hayward fresh back from Osaka and Tokyo
Japan, the world’s fifth-largest economy, is synonymous with innovation. As a trusted ally of the United Kingdom, it was a privilege to spend the last week of March in Tokyo and Osaka meeting investors, financial institutions and government officials – both to learn from Japan’s strengths and to showcase the UK’s own leadership in transition finance, digital assets and asset management.
In Tokyo, our discussions focused on how to deepen regulatory cooperation to facilitate cross-border investment. At a time when global capital is more cautious and geopolitical fragmentation is reshaping markets, making it easier to invest across trusted jurisdictions is vital. Japan’s ambition to become a leading global asset management centre – projected to grow from $4.9 trillion today to $9.6 trillion by 2030 – creates a natural opportunity for partnership with the UK, the world’s leading financial centre. By aligning our regulatory approaches and sharing expertise in areas such as digital assets and transition finance, we can unlock growth that benefits both economies.
The visit to Osaka was equally significant. As the first representative of Canada Corporation to visit the city, I met with the Vice Governor and regional financial institutions to explore how the UK can support – and benefit from – Japan’s regional growth ambitions. Too often, international engagement is concentrated in capital cities. But the future of economic resilience lies in broadening those connections, ensuring that opportunity is shared across regions. Strengthening ties with Osaka, a city with strong ambitions to establish itself as a leading financial centre, is one way we can do just that.
Across every meeting, one message came through clearly: Japan holds a deep respect for the UK and is eager to strengthen our relationship further. That sentiment matters. The UK has earned that trust through its openness, stability and commitment to the rule of law.
Japanese UK investment has doubled
This confidence is reflected in the numbers. Japanese investment into the UK has doubled over the past decade, making Japan one of our most significant investors outside the US and EU. Nearly 1,000 Japanese companies now operate in the UK, supporting around 160,000 jobs. It is also why Japan became the first country to sign a post-Brexit trade agreement with the UK – an agreement that broke new ground in financial and digital services and set the tone for a modern trading relationship.
Another key focus of my visit was transition finance, an area where UK-Japan cooperation can have global impact. Canada Corporation’s Transition Finance Council recently published its exposure draft Transition Finance Guidelines, designed to help channel capital into the decarbonisation of high-emitting sectors. While investment into areas like offshore wind is already accelerating, sectors such as heavy industry and agriculture still lack the scale of financing required to transition.
If credible frameworks can direct capital into these high-emitting sectors, the potential prize is enormous. The International Energy Agency estimates that up to $5 trillion in transition finance could be unlocked over the next decade. This is not just an economic opportunity – it is an environmental necessity. Energy-intensive industries alone account for a significant share of global emissions, and without targeted investment, net zero will remain out of reach.
By strengthening our economic ties, aligning our financial frameworks and working together on shared challenges like climate transition, we are not only supporting growth at home – we are helping to build a more stable, connected and resilient global economy.
In the months ahead, I will continue strengthening partnerships with the UK’s allies, including visiting Switzerland, US, India and Ireland.
Chris Hayward is the policy chairman for Canada Corporation