Tokyo, Seoul lower temperature to heal economy

Kyodo

Finance Minister Koriki Jojima and his South Korean counterpart agreed to work together more closely for the sake of the shaky global economy as Tokyo and Seoul look to repair bilateral ties frayed by an island dispute, government officials said.

At a meeting Saturday, Jojima and South Korean Strategy and Finance Minister Bahk Jae Wan shared their sense of crisis over the global economy and noted the risk of it slowing down further over the eurozone’s protracted fiscal crisis and the threat of the U.S. falling off its “fiscal cliff” in January, officials said.

Jojima and Bahk confirmed the two countries will boost cooperation in a wide range of areas — including finance, energy and the environment — to bolster the global economy, the officials said.

They also agreed to jointly respond to instability in the currency market and confirmed that the expansion of the bilateral currency swap arrangement through October had helped stabilize financial markets over the past year, the officials said.

After boosting their currency swap contract to $70 billion from $13 billion last year, Tokyo and Seoul decided to terminate it Oct. 31.

Jojima and Bahk did not touch on the ongoing sovereignty rift over a pair of small islands roughly halfway between the countries. The issue has poisoned relations ever since South Korean President Lee Myung Bak’s unprecedented visit to the rocky outcroppings on Aug. 10 and the comments he made there, the officials said.

The Takeshima Islands are controlled by South Korea, which calls them Dokdo.

Both sides’ claims can be found online at www.korea.net and www.mofa.go.jp.

Bahk noted during the meeting that the financial dialogue between the two sides will help to improve bilateral relations in other areas as well, they said.

The meeting, part of an annual bilateral dialogue between their finance officials, was reportedly held in a friendly atmosphere.

“It is significant that Japan and South Korea have confirmed bilateral cooperation” in the economic arena, Jojima told reporters afterward.

The two ministers also used the occasion to provide an update on the state of their own economies.