Japan and South Korea held a fresh round of finance dialogue on Tuesday to discuss common challenges, from sanctions against Russia and North Korea to the depreciation of the yen and the won against the U.S. dollar.
Japanese Finance Minister Shunichi Suzuki and his South Korean counterpart Choi Sang Mok are also expected to exchange views on the global economy and cooperation in the field of finance.
After a chill in diplomatic relations due to disagreements over wartime history and a territorial dispute, the two countries held a finance dialogue in 2023 for the first time in seven years. In a sign of a thaw, the two sides revived a currency swap agreement aimed at providing each other funds in times of emergency.
The ninth round of the finance talks, a framework launched in 2006, comes as nuclear-armed Russia and North Korea are seeking to deepen their partnership, in an apparent counter to the joint front formed by the United States and other Western nations.
Russia has been slapped with economy-crippling sanctions over its war against Ukraine, while North Korea has defied international pressure and sanctions over its development of nuclear and missile capabilities.
On the economic front, Japan and South Korea face the challenge of their rapidly weakening currencies.
While their currencies' depreciation gives their export-reliant economies a boost, the speed at which the yen and won have depreciated against the dollar has raised concern among policymakers.
The finance chiefs of Japan, South Korea and their closest ally the United States noted "serious concerns" about the sharp depreciation of the yen and the won versus the dollar during their meeting in April.
The dollar remains a favorite among investors due to the strength of the U.S. economy and prospects that the Federal Reserve will not shift to cutting rates soon.
