Friday, Oct. 12, 2012

By JUN HONGO and KAZUAKI NAGATA

Japan and South Korea agreed to set aside their territorial dispute and work closely on coordinating economic issues and cultural exchanges, Finance Minister Koriki Jojima told reporters Thursday.

Following a bilateral meeting in Tokyo with South Korean counterpart Bahk Jae Wan on the sidelines of the annual meetings of the International Monetary Fund and World Bank, Jojima said that the two sides exchanged views on the global and regional economy and agreed to work together through the Group of 20 and the ASEAN plus 3 frameworks. Japan and South Korea agreed that "close cooperation on economic and fiscal issues should continue," Jojima said.

The two nations have seen their economic ties fray amid an escalating dispute over control of the Takeshima islets, known as Dokdo in South Korea. On Tuesday, they announced an end to their long-standing expanded currency swap accord.

The swap agreement, which limits exposure to exchange rate fluctuations, will be reduced from $70 billion to $13 billion at the end of this month.

But Jojima said he and Bahk agreed Thursday the swap accord played a role in stabilizing the regional economy and it was a mutual understanding to end the scheme "as initially scheduled" at the end of this month.

The finance minister also said the two sides agreed to meet again at the appropriate time to discuss bilateral economic issues.

Meanwhile, Jojima also held a bilateral meeting with U.S. Treasury Secretary Timothy Geithner on Thursday, at which he reportedly expressed Japan's concern that the strong yen doesn't reflect the economy's fundamentals.

During their meeting, which lasted less than 15 minutes, Jojima also exchanged opinions with Geithner on the state of the global economy as well as Japan's efforts to aid Myanmar's transition to democracy, according to Finance Ministry officials.

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