Korea, Japan finance ministers aim to strengthen weakened currencies through cooperation

The economic chiefs of Korea and Japan agreed to cooperate on stabilizing the weak currencies of both countries amid lingering macro uncertainties during a bilateral ministerial meeting on Tuesday.

Korea’s Financial Minister Choi Sang-mok, left, and his Japanese counterpart Shunichi Suzuki pose for a photo during a bilateral economic ministerial meeting held in Seoul on Tuesday. [MINISTRY OF ECONOMY AND FINANCE]

The economic chiefs of Korea and Japan agreed to cooperate on stabilizing the weak currencies of both countries amid lingering macro uncertainties during a bilateral ministerial meeting on Tuesday.

Korea's Minister of Economy and Finance Choi Sang-mok and his Japanese counterpart Shunichi Suzuki also discussed each administration's key policy agendas, as both countries face population crises driven by rapidly falling fertility rates while also undertaking corporate governance reform initiatives.

The Korea-Japan annual economic ministerial meeting, in its ninth edition this year, was held at the government complex in central Seoul, according to the Ministry of Economy and Finance. It marked the first time in eight years that the city has hosted the meeting.

The Finance Ministry said in a release that the two ministers “shared serious concerns regarding the currency depreciation of both countries and agreed to continue to implement appropriate measures,” while also addressing macroeconomic uncertainties, such as geopolitical risks, the potential slowdown in major economies and heightened foreign exchange rate volatility.

The latest meeting came two months after Choi and Suzuki jointly addressed the depreciation of their respective currencies against the dollar.

Moreover, Choi proposed three key pillars of collaboration in his opening remarks for the meeting: policy cooperation, economic partnership and joint responses to global issues.

"It is essential to create an opportunity for both countries to thrive together by expanding the scope of bilateral economic cooperation into the corporate and private sectors, including capital market advancement and investments,” said Choi.

As the ministers agreed on the need to enhance bilateral investments, Suzuki welcomed the Korean government’s drive to make the market more accessible to foreign investors, including its efforts for inclusion in the World Government Bond Index, or WGBI.

Choi also said that Korea and Japan would share policy plans and experiences “as partners” to address common issues, such as falling birthrates and declining productivity.

The economic ministerial meetings initially began in 2006, but were halted after the seventh meeting held in Seoul in 2016, as the relationship between the two countries had soured in 2017 due to the issue of forced labor in Korea during World War II. The relationship was further strained in 2019, as Japan imposed import restrictions against Korea in retaliation for the Korean court rulings that ordered Japanese companies to compensate the Korean victims.

The meetings were resumed last year in Tokyo as the relationship began to improve.

During last year's meeting, the two countries agreed to revive a $10 billion currency swap line after an eight-year hiatus. Choi and Suzuki agreed to continue discussing measures to further improve the currency swap, said the ministry.

Meanwhile, Suzuki expressed his condolences to the victims of the recent fire at a battery plant in Hwaseong, Gyeonggi, in his remarks Tuesday.

BY SHIN HA-NEE [shin.hanee@joongang.co.kr]