Business

Japan business chief says South Korea rift and Brexit still big risks

Kyodo

Keidanren Chairman Hiroaki Nakanishi says Japanese companies continue to face major risks stemming from heightened tensions with South Korea and the uncertain outlook for Britain’s exit from the European Union.

The 73-year-old Nakanishi, who is also chairman of Hitachi Ltd., said Monday in his first news conference since being hospitalized in late May that the deteriorating relationship between Japan and South Korea shows no signs of improving.

“The situation has become very difficult,” he said. “I hope the relationship developed by business activities would bring the two countries to better circumstances.”

Japan’s tightened controls on exports of some chipmaking materials to South Korea, followed by the two countries deciding to remove each other from their preferential trade lists, along with a feud over wartime history, has seen the relationship fall to its lowest point in years.

“I have no … ideas for breakthrough solutions,” Nakanishi said.

The unclear impact of Britain’s withdrawal from the European Union also remains a major concern.

Close attention will still need to be paid to the situation even though there is likely to be no imminent risk of a no-deal Brexit, he said.

“It is not favorable at all for the risk (of Brexit) to grow,” Nakanishi said.

Britain’s House of Commons last week passed a bill to prevent Prime Minister Boris Johnson from taking Britain out of the European Union without a deal on Oct. 31.

Nakanishi resumed work as the head of Japan’s most influential business lobby this month after he was diagnosed with lymphoma and hospitalized May 21, and for which he continues undergoing treatment, he said.

“I would like to resume my duties at a slow pace while watching my physical condition,” he said.