Japan, South Korea discuss foreign exchange swap deal in first financial talks since 2016 Reuters

By Tetsushi Kajimoto

TOKYO (Reuters) – Japan and South Korea will hold their first bilateral financial dialogue in seven years on Thursday, both seeking to mend strained relations as they face risks. joint geostrategic from an increasingly assertive China and an unpredictable North Korea.

Japanese Finance Minister Shunichi Suzuki and his South Korean counterpart Choo Kyungho are expected to agree on the need to reinstate the lapsed bilateral currency swap agreement, according to three government officials familiar with the matter. on the agenda of the negotiations in Tokyo.

The swap deal expired in 2015, analysts said, amid worsening relations over issues related to Japan’s wartime occupation of the Korean Peninsula and its restoration. This agreement will symbolize an improvement in relations. It was never used.

The swap deal, introduced in 2001 to aid in the financial crisis, and its size, which peaked at $70 billion in 2011, has declined starting in 2012 amid diplomatic tensions.

Masato Kanda, Deputy Finance Minister in charge of international affairs, told reporters: “We must strongly promote the momentum of improving the history of Japan-Korea relations. It is necessary to strengthen bilateral ties. as global and regional economies face great risks and uncertainties.

“Our ambition is to create a package that fosters cooperation in broader areas for the first time… while bilateral currency swaps are also a target of discussion this time around,” he said. he said before the meeting.

The ministers will also discuss global economic development, infrastructure investment in developing countries and the role of both countries in multilateral financial cooperation.

“Japan and South Korea are important neighbors that must work together to address various challenges surrounding the global economy, as well as the regional and international community,” Suzuki said at a meeting. short with Choo last month. “We are experiencing problems such as North Korea’s nuclear missile development and Russia’s invasion of Ukraine. Japan considers these unacceptable and something that the two countries must deal with together. .”

The bilateral financial talks, the eighth of its kind, were last held in 2016. The talks were supposed to take place every year under the 2006 agreement on shuttle diplomacy.