Prime Minister Theresa May spoke of the "opportunity" of Brexit but acknowledged it would be "no small undertaking" as she met Thursday with Japanese companies investing in Britain.
"Of course I recognise that the UK's forthcoming exit from the European Union is no small undertaking but importantly it does present the opportunity to strike free trade deals around the world," she said.
But speaking to Sky News after the meeting, Japan's ambassador to London Koji Tsuruoka warned of the "high stakes" of Brexit.
"If there is no profitability of continuing operation in the UK -- not Japanese only -- no private company can continue operation," he said.
"So, it's as simple as that. This is all high stakes that I think all of us need to keep in mind," he said.
Britain intends to seek free trade deals with its major trading partners once it leaves the EU next year.
There are 879 Japanese companies employing 142,000 staff in Britain, including carmakers Honda and Nissan.
A leaked government assessment published in British media in recent days suggests the car industry could face cost increases of between five and 13 percent under different possible post-Brexit scenarios.
Financial services could see a five to 10 percent cost increase, according to the forecasts, which the government says do not include its desired scenario of a bespoke trade deal with the EU.
- Uncertainty a 'major concern' -
May's meeting in Downing Street was attended by senior executives of Honda, Mitsubishi, Nissan, Panasonic and Toyota, as well as Nomura and other banking giants.
May visited Japan in August last year aiming to push forward with plans for a Britain-Japan free trade agreement.
But analysts said there will not likely be much progress until Japan and the EU wrap up a nearly-finalised trade deal, and details of Brexit are worked out.
Japanese megabank MUFG last year picked Amsterdam as a base for its EU securities operation by moving some functions from London in preparation for Brexit.
Other Japanese firms including Nomura Holdings, Daiwa Securities and Sumitomo Matsui Financial Group have said they are planning to move their main EU bases from London to Frankfurt.
Just weeks after the Brexit referendum in 2016, a Japanese government taskforce told Britain and the EU to minimise the "harmful effects" of Brexit.
"Japanese businesses with their European headquarters in the UK may decide to transfer their head-office function to continental Europe if EU laws cease to be applicable in the UK after its withdrawal," said the 15-page document.
"Uncertainty is a major concern for an economy," it said.
"What Japanese businesses in Europe most wish to avoid is the situation in which they are unable to discern clearly the way the Brexit negotiations are going, only grasping the whole picture at the last minute."