Britain's vote to leave the European Union dismayed and disappointed millions across the United Kingdom, Europe and beyond. The mood of "regrexit" is palpable in Japan. Brexit fears are causing an appreciation of the yen that is weakening Japan's export-led economy. Companies such as Nissan, Hitachi and Nomura set up operations in Britain as a gateway to Europe. The £38 billion that Japan has invested in the U.K. is now at risk, dependent on whether Britain retains access to the European single market following its exit from the EU. Uncertainly following Britain's referendum may also hamper Japan's current trade deal negotiations with the EU.
The consequences of Brexit are already dire. Prime Minister David Cameron has resigned. Sterling and the FTSE fell dramatically. Scotland may leave the U.K. And peace in Northern Ireland, brokered in the context of British and Irish shared membership of the EU, hangs in the balance. Less than a month since the referendum, some Brexiters are experiencing cold feet.
But the U.K.'s departure from the EU, while highly probable, is not inevitable. Three main scenarios could halt Brexit.