Japan and South Korea on Thursday will discuss ways to deepen bilateral economic and financial cooperation at their first finance dialogue in seven years, with the revival of a currency swap agreement in focus.
Japanese Finance Minister Shunichi Suzuki and his South Korean counterpart Choo Kyung Ho are expected to cover a range of topics, from the state of regional and global economies, how to build robust supply chains and investing in overseas infrastructure.
The return of the dialogue framework provides further evidence that bilateral relations are thawing after a period in which they had been at a low ebb due to disagreements over wartime history.
When Suzuki and Choo met in South Korea in May, they agreed to resume the finance dialogue that was last held in 2016.
At focus is a currency swap agreement that would ensure access to foreign currencies like the U.S. dollar in times of crisis, by exchanging local currencies.
A previous yen-won swap agreement expired in 2015 and has not been renewed amid friction over South Korea-controlled, Japan-claimed islets in the Sea of Japan, and the long-standing issue of comfort women, who were forced to work in Japanese wartime military brothels.
Under Yoon Suk Yeol, who became South Korea's president in 2022, bilateral ties have gradually begun to improve. He proposed a solution to the long-standing issue of wartime labor compensation that had sent Seoul-Tokyo ties to their lowest point in years.
Prime Minister Fumio Kishida visited South Korea in May, becoming the first Japanese leader in over five years to do so. Japan on Tuesday formally decided to relist South Korea as a preferred trade partner on July 21 in a reciprocal move after Seoul similarly changed Tokyo's status.
