Japan The 400th Anniversary of Anglo-Japanese Diplomatic and Trade Relations Diplomatic and trading relations between the

e United Kingdom and Japan began in October 1613 following an exchange of gifts between the East India Company, on behalf of King James I, and Shogun Tokugawa Hidetada. This anniversary is being marked by a year-long programme of events being planned for the UK and Japan. The events included a dinner at the Guildhall in September, with the Japanese Ambassador to the UK as the principal guest These events are being organised by the Japan 400 (J400) Advisory Council. The Council comprises senior diplomatic, business, educational and cultural sector figures with extensive knowledge of Anglo-Japanese relations. The programme of events is sponsored by a number of organisations including Hitachi (the Japanese engineering conglomerate which has its European Headquarters in London), the GB Sasakawa Foundation (a NonGovernmental Organisation founded in 1983 to enhance UK-Japanese cultural relations), the East India Company and British Airways. It is being promoted by the Japan Society.

Prime Minister of Japan Shinz Abe became the Japanese Prime Minister for the second time in December 2012. He is the President of the Liberal Democratic Party. Appointed to the cabinet in October 2005, he was given the high-profile role of chief cabinet secretary. When he became Prime Minister a year later (at which time he was Japans youngest Prime Minister since World War II), he was seen as a man in predecessor Junichiro Koizumi's image - outspoken and with a similar popular appeal to voters. The Japanese Economy and Trade Relations Japan is currently the worlds 3rd largest economy. More than 1,400 Japanese companies have established UK subsidiaries, creating 130,000 jobs. There is a major Japanese banking cluster in London. British exports to Japan are worth 8bn annually, with particular emphasis on chemicals, nuclear energy and retail. The UK supports the creation of an EU-Japan Free Trade Agreement. Japan has the worlds second largest insurance market after the US; the gross premium income of the industry is estimated at USD 655 billion (of which 80% accounts for life insurance and the rest non-life). Exports from the UK are worth 9.6 billion a year and 450 British companies have operations in Japan. British companies are succeeding in Japan across a wide range of manufacturing, consumer goods, high tech and services sectors.

Trade liberalisation is now firmly on the political agenda in Japan with recent progress on regional and bilateral agreements pushed by the new government. Prime Minister Abe formally announced in March that Japan is to join the Trans-Pacific Partnership (TPP) talks to reduce tariffs between countries around the Pacific, including the US, Australia, Mexico and other large economies. The opening of negotiations on the Economic Partnership Agreement with the EU earlier this year should be a significant medium to longer term opportunity for UK companies with the European Commission estimating that an EU-Japan FTA could increase EU exports to Japan by 2030%. Abes economic philosophy has been characterised by the three arrows of fiscal expansion, structural reform and quantitative easing. The Japanese Central Bank has introduced a huge stimulus package equal to almost 10% of Japanese GDP. The aim is to achieve an inflation rate of 2% within 2 years. A large programme of government spending is also planned. Abenomics appears to be bearing fruit. Annualised growth was an impressive 4.1% in the first quarter of this year and 3.8% in the second. Consumer prices, which have mostly been falling for years, rose by 0.9% in the year to August. Japans national debt is over 200% of GDP, the highest ratio in the rich world. This is a result of the burst of the countrys financial and property bubbles in the early 1990s, when government spending leapt as a result of Keynesian attempts to end the slump and spiralling health and pension costs, and tax revenues stagnated. Last week Abe announced a rise in the consumption tax from 5% to 8% taking effect next April. The consumption tax is not popular in Japan. Last time it was raised, in 1997, caused the economy to weaken sharply.

2020 Olympics It was announced in September that Tokyo had been chosen to host the 2020 Olympic and Paralympic Games, ahead of Istanbul and Madrid. It is likely that there will be an increased dialogue between with London over the next seven years as Tokyo prepares for the Games. Relevant City activities The Lord Mayor visited Japan in April this year, accompanied by a trade delegation. In June, the Prime Minister of Japan, Shinzo Abe, gave a keynote speech on economic policy, focusing on the modernisation of the Japanese economy opening up to more international competition, in the Old Library.