South Korea, Japan finance heads to hold first talks since 2016

South Korea and Japan’s finance ministers will hold a bilateral meeting early next month for the first time in seven years, heralding closer cooperation in economic policy that has been hampered by diplomatic conflict.

South Korean Finance Minister Choo Kyung-ho told reporters during a visit to the United States that he has agreed to meet Japanese Finance Minister Shunichi Suzuki, according to a media pool report.

They will meet on the sidelines of the Asian Development Bank (ADB) annual meetings, due to be held on May 2-5 in Incheon, South Korea, although other details have yet to be decided, Choo said.

“It is significant in that it will be the first step towards reviving regular bilateral meetings,” Choo said, without elaborating.

Regular annual meetings between the two countries’ finance ministers have been suspended since 2016 due to disputes over wartime history.

But last month, at a summit between South Korea’s Yoon Suk Yeol and Japan’s Fumio Kishida, the two neighbours promised to put aside their difficult shared history and said they would work together to counter regional security challenges.

Financial markets will likely pay close attention to whether the finance ministers will discuss resuming a bilateral currency swap arrangement – one that had served as a backstop against any potential currency crisis but which expired in February 2015.