LONDON – Prime Minister Shinzo Abe cautioned Britain on Thursday that a vote to leave the European Union in a June 23 referendum will make Britain less attractive for Japanese investors.
“A vote to leave would make the U.K. less attractive as a destination for Japanese investment,” Abe, who leads the world’s third largest economy, said through a translator at a news conference with Prime Minister David Cameron.
Abe’s intervention in Britain’s referendum campaign comes less than two weeks since U.S. President Barack Obama bluntly warned Britain that it would be “in the back of the queue” for a trade deal with the United States if it drops out of the EU.
While Abe said that EU membership is a matter for the British people, he added that Japanese interests are also at stake in the referendum.
“Japan very clearly would prefer Britain to remain within the EU,” Abe said. “Many Japanese companies set up their operations in the U.K. precisely because the U.K. is a gateway to the EU.”
Abe said about 1,000 Japanese companies operate in the U.K., employing 140,000 people.
Cameron said Britain benefits more from Japanese investment than from any other country apart from the United States. He said Japan has investments worth a total of £38 billion ($55 billion) in Britain.
“Japanese firms see Britain as the gateway to Europe,” said Cameron, who called the referendum and is leading the campaign to keep Britain in the club it joined in 1973.
A British exit would unleash volatility in foreign currency, stock and bond markets, undermine post-World War II European efforts toward integration and raise questions about the 21st century fate of Britain’s $2.9 trillion economy.
“Britain’s friends around the world, including Japan, will be watching your decision on June 23 with very close attention,” Abe said.
As he did in talks with other European leaders, Abe highlighted the need to stimulate the global economy through flexible government spending, such as by increasing public works projects.
“To revitalize the global economy, there is a need to accelerate structural reform and expand flexible fiscal spending. We hope to issue a stronger message (on the issue) as the G-7,” Abe said.
During their talks, Abe and Cameron agreed that each country should pursue monetary policy, government spending and structural reforms in a balanced manner.
Abe also said that Japan will closely monitor foreign exchange markets, and will act if necessary.