Asia moves to reassure firms as Brexit uncertainty spikes

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Trade between the UK and Japan hit £28bn last year

Countries in Asia have moved to reassure businesses as the defeat of Theresa May’s Brexit deal creates fresh uncertainty for their economies and trade.

Japan, a vocal critic of a no-deal Brexit, said it would seek clarity on the outlook and support firms.

South Korea and Australia said they would continue to negotiate on new or existing trade deals.

Market reaction in Asia following the vote was muted.

The BBC’s Asia business correspondent Karishma Vaswani said there was little movement in the pound in Asia hours on Wednesday as traders said “Brexit fatigue” had crept in.

But countries in the region moved to reassure local businesses after the rejection of a Brexit deal stoked fresh uncertainty.

Japan’s chief cabinet secretary Yoshihide Suga said the government would continue to seek clarity on the outlook, and would support firms to minimise the negative impact of Brexit.

Last week the country’s Prime Minister Shinzo Abe said the “whole world” wants the UK to avoid a no-deal Brexit.

A no-deal Brexit would see the UK leave without a withdrawal agreement and start trading with the EU on the basis of World Trade Organization rules.

Trade between the UK and Japan hit £28bn ($36bn) last year, and Japanese companies already employ 150,000 people in the UK.

‘Uncertain times’

The South Korean government will hold an inter-agency meeting on Wednesday on next steps.

They will discuss treaties – including the South Korea-EU free trade agreement – and the direction of related consultations with Britain, according to ministers in Seoul.

South Korea’s Yonhap news agency reported the trade ministry will hasten efforts to secure a free-trade agreement with Britain.

More than 100 South Korean firms operate in Britain, with two-way trade totalling £11.2bn.

Australia’s trade minister Simon Birmingham said Brexit uncertainty had prompted local businesses to take “contingency actions”.

In an interview with the ABC radio, the minister said firms should be reassured that the government is taking “a belt and braces approach to Brexit, that we… have free trade agreement negotiations underway with the EU” and a trade working group set up with the UK.

Mr Birmingham said Australia is working closely to ensure existing agreements could be replicated “to keep the trade and market access arrangements as steady and stable as possible in these very uncertain times”.