Japan's Foreign Ministry says over a thousand Japanese companies had their regional headquarters in Britain as of October 2015. Only Germany had more in Europe.
Many Japanese firms regard Britain as a business hub for the region. The country's official language is English and its environment is seen as business-friendly.

Many Japanese automakers including Nissan, Toyota, and Honda operate factories in Britain.

Nissan officials announced last October they would continue production there after the country leaves the EU. They said the UK government's support and assurances encouraged their decision.

But Nissan officials might now review their production system. That's because Britain leaving the EU-single market could result in tariffs being imposed on vehicles exported from the UK to EU member nations.

The automaker plans to examine how Britain's complete withdrawal will affect its business.

Japanese pharmaceutical firms may also reconsider their strategies. The European Medicines Agency tests drug products and is based in London. The body needs to approve products before they can be sold in EU countries. But experts say the EMA may re-locate after Brexit.

The head of a Japanese association of drug makers has expressed concern over how Britain's decision could affect Japan's medical industry.

Yoshihiko Hatanaka, the president of the Japan Pharmaceutical Manufacturers Association, says separate approval systems between Britain and the EU will make a significant impact on the markets.

Many Japanese financial firms that operate in Europe may also be affected. That's because they use the EU's "single passport" system. It allows companies legally established in one member country to provide services throughout the bloc.

Sumitomo Mitsui Banking Corporation and Daiwa Securities obtained a single passport in Britain. But their passports could become invalid after Brexit.

Analysts say they might now apply for a single passport again in the EU by leaving London and setting up a business base elsewhere.