Market AnalysisJun 15, 20262 Min
UK, Japan sign mega £18 billion investment agreement
The UK and Japan signed a mega investment agreement on Sunday that is likely to generate over £18 billion ($24 billion) across multiple deals.
The agreement was signed during a visit to London by Japanese Prime Minister Sanae Takaichi. British Prime Minister Keir Starmer and Takaichi held talks at the Downing Street office before both of them left for France for the G7 summit that begins on Monday.
More than 10 trade agreements were signed under the deal to bolster economic and technological partnership between the two nations. These included investment in a £9-billion offshore wind farm project and another £9-billion infusion in UK infrastructure and financial services.
The total trade between the UK and Japan is currently worth around £140 billion, according to the UK government.
Starmer called the deal with Japan “a new era of cooperation between our two countries”. He said: “These landmark agreements will bring multibillion-pound investment into the UK, creating tens of thousands of new jobs and driving new developments.”
Takaichi, meanwhile, highlighted that deep security ties were at the foundation of Japan’s relationship with the UK. She said: “We concluded to further accelerate the progress of the Global Combat Air Program (GCAP), which is the cornerstone of our security cooperation.”
Launched in 2022 by Britain, Italy and Japan, the GCAP is an international military programme which aims to develop a next-generation fighter jet by 2035, replacing the Eurofighter Typhoon. Starmer, too, reiterated that GCAP was at the heart of the bilateral relationship with Japan.
Interestingly, the GCAP booster comes amid a severe crisis in the Starmer’s government over military funding. British defence minister John Healey resigned last week over a long dispute about military spending, accusing Starmer of failing to commit the resources needed to keep the country safe.
Besides defence, the UK and Japan also announced plans to launch the UK-Japan Frontier Tech Partnership (FTP) that aims to blend the UK’s research prowess with Japan’s hardware and manufacturing power.
“As each other’s closest security partners in Europe and Asia respectively, the UK and Japan are uniquely positioned to harness our shared innovation capabilities,” a press release by the UK government on Sunday said. “By working together as like-minded nations, our science and technology relationship will deliver high-value growth and technological agency,” it added.
A large number of projects were announced to build cooperation in areas such as AI, space, quantum computing and cybersecurity. “Together, the UK and Japan will be AI makers and not just AI takers,” the release said.
The investment agreement between the two nations also included a strengthening of collaboration between Rolls-Royce and Japan’s Atomic Energy Agency (JAEA).
Rolls-Royce announced that it has signed two trilateral memorandums of cooperation with United Kingdom National Nuclear Laboratory and JAEA to accelerate the introduction of advanced nuclear technologies in the UK.
The three parties will cooperate to advance high-temperature gas-cooled advanced modular reactor (AMR) technology and the next generation coated particle fuel (CPF) that powers them.
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