Japan's ties with South Korea have improved significantly since last year's bilateral deal to settle the issue of Korean "comfort women," according to a draft version of the government's annual foreign policy report.

Sharing key strategic interests, South Korea and Japan are each other's most important neighbors, says the draft of the 2016 Diplomatic Bluebook, which was obtained Monday.

Friendly relations between the two countries are essential for peace and stability in the Asia-Pacific region, the draft notes.