Japan, South Korea resume financial dialogue amid geopolitical tensions


  • Japan-Korea first bilateral financial talks in seven years
  • Two countries resume regular financial dialogue, possibly annually
  • Asian policy makers discussing safeguards

INCHEON, South Korea (Reuters) – Japan and South Korea agreed to resume regular dialogue at their first financial summit in seven years on Thursday. strained relationship.

The resumption of bilateral financial talks comes ahead of Japanese Prime Minister Fumio Kishida’s planned visit to South Korea next week for a meeting with President Yoon Seok-yeol.

Asian policymakers also gathered at the Asian Development Bank’s (ADB) annual meeting in Incheon, South Korea, this week to discuss the challenges of the region’s economy and ways to strengthen buffers against various shocks.

Japan’s Finance Minister Shunichi Suzuki said in a meeting with South Korea’s Finance Minister Joo Kyung-ho, “Japan and South Korea are facing important challenges that must be addressed through cooperation in addressing various issues surrounding the global economy, regional communities, and the international community.” It’s a neighboring country,” he said.

“Regarding geopolitical challenges, we have experienced incidents such as North Korea’s nuclear missile development and Russia’s invasion of Ukraine. I think so,” he said.

Choo said the two countries could strengthen private-government partnerships in high-tech industries such as semiconductors and batteries.

Japan and South Korea plan to resume their regular financial dialogue, which is likely to be held annually, “at an appropriate time.”

According to South Korea’s Ministry of Finance, Mr. Chu will visit Japan this year to meet with Mr. Suzuki again.

Developing Asia is expected to achieve strong economic growth of 4.8% in 2023 despite slowing growth in advanced economies, up from 4.2% in 2022 as China recovers, according to ADB forecasts. faster than growing.

However, various risks are clouding the economic outlook for the region.

“Despite close economic ties between China, Japan and South Korea, recent economic ties have seen a slowdown, particularly in terms of trade in goods and services,” the three financial leaders said at the trilateral meeting. said in a statement issued later. meeting on Tuesday.

China’s finance minister and the governor of the People’s Bank of China were not present at the tripartite meeting, and were represented by their respective representatives.

avoid the risk

The recent failures of two U.S. banks have alerted policymakers to the fragility of the global banking system and the potential for market turmoil as a result of aggressive U.S. interest rate hikes.

Building stronger buffers against shocks is a key focus of the meeting of the finance ministers and central bank governors of the 10-member Association of Southeast Asian Nations (ASEAN) and the larger ASEAN+3 group of Japan, China and South Korea. will be one of the topics. late Tuesday.

Asian policymakers stress their countries have enough foreign exchange reserves and buffers to stave off another crisis, but analysts step up deal to counter market turmoil He said he may see room for it.

Japan, which is co-chairing with Indonesia at this year’s ASEAN+3 meeting, hopes to discuss a network of currency swap lines called the Chiang Mai Initiative Multilateralization (CMIM).

Co-Chair of the meeting, Indonesia’s Finance Minister Sri Mulyani Indwati, said member countries’ cooperation on CMIM and other initiatives is essential for the development and prosperity of the region.

Specifically, Tokyo is keen to strengthen the use of existing currency swap lines and propose a facility that would allow members to raise funds in an emergency, said three people with first-hand knowledge of the matter. An informant said.

Interviewed by Reika Kihara, Lee Jihoon Edited by Kim Changran

Our standards: Thomson Reuters Trust Principles.

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