Will the Korea-Japan Finance Ministers Meeting Resume? Government Considering It as a Follow-up Measure to the Summit

Restoration After 7 Years Since 2016

South Korea and Japan are increasingly likely to resume their finance ministers' meetings following the summit between their leaders. This would restore the dialogue channel between the two countries' financial authorities for the first time in seven years since it was suspended in 2016.

According to officials on the 21st, the Ministry of Economy and Finance is considering the resumption of the Korea-Japan finance ministers' meeting as a follow-up measure to the Korea-Japan summit.

The Korea-Japan finance ministers' meeting is a cooperative channel where the heads of financial authorities, such as South Korea's Minister of Economy and Finance and Japan's Minister of Finance, discuss economic cooperation measures.

The meetings, which began in 2006, last took place in August 2016 when Yoo Il-ho, then Deputy Prime Minister and Minister of Economy and Finance of South Korea, met with Taro Aso, then Deputy Prime Minister and Minister of Finance of Japan. The meetings were suspended due to the freezing of bilateral relations caused by issues such as the installation of the comfort women statue in front of the Japanese Consulate General in Busan in 2017 and Japan's export restrictions on semiconductor materials in 2019.

As both countries recently declared the 'normalization' of their relationship and agreed to increase financial and foreign exchange cooperation, the restoration of the dialogue channel between financial authorities is expected to proceed as a priority.

President Yoon Suk-yeol and Japanese Prime Minister Fumio Kishida shake hands while posing for a commemorative photo ahead of the expanded Korea-Japan summit held at the Prime Minister's Official Residence in Tokyo on the afternoon of the 16th.
[Image source=Yonhap News]

Earlier, President Yoon Suk-yeol stated at a joint press conference following the summit with Japanese Prime Minister Fumio Kishida on the 16th that "we agreed to promptly restore consultative bodies that discuss the joint interests of the two countries, including strategic dialogues between diplomatic and economic authorities."

Cooperation in the financial and foreign exchange sectors between South Korea and Japan includes strengthening coordination at international meetings such as the Group of Twenty (G20) and the ASEAN (Association of Southeast Asian Nations) +3 (South Korea, China, Japan) meetings.

However, the Korea-Japan currency swap is not expected to be discussed immediately. This is interpreted as reflecting the perception that it is not an urgent matter considering recent financial markets and other factors. A currency swap is an agreement that allows countries to deposit their own currency with the other country and receive the other country's currency or dollars in times of emergency, such as a foreign exchange crisis.

The Korea-Japan currency swap began in July 2001 with a scale of 2 billion dollars and increased to 70 billion dollars by the end of 2011. However, it has been suspended since February 2015 due to the cooling of Korea-Japan relations.