Korea, Japan Discuss Economic Cooperation, FX Stability at Tokyo Ministers’ Meeting

South Korea and Japan held the 10th Korea–Japan Financial Ministers’ Meeting in Tokyo, with Deputy Prime Minister and Finance Minister Koo Yoon-cheol meeting Japanese Finance Minister Katayama Satsuki. The talks focused on global and regional economic conditions and ways to deepen bilateral and multilateral cooperation.

The two officials said the world economy remains on solid growth footing but faces ongoing risks from geopolitical tensions and other headwinds. They discussed the situation in the Middle East and volatility in financial markets, stressing the need for close collaboration to ensure stable energy supplies and noting interest in boosting investment in artificial intelligence to spur growth.

They also expressed serious concern about sharp declines in the won and the yen, agreeing to monitor foreign exchange markets closely and to take appropriate steps to prevent excessive volatility and disorderly movements.

Both sides agreed to promote diversification of supply chains for key minerals and to strengthen cooperation on supply-chain policy. They reaffirmed support for the Chiang Mai Initiative Multilateralisation (CMIM) as part of ASEAN+3 efforts to bolster regional financial safety nets.

In multilateral forums, the ministers said they would actively cooperate within groups such as the G20 and the G7. Korea has been invited three years in a row to G7 finance ministers and central bank chiefs meetings since 2023, and an 11th Korea–Japan finance ministers meeting is planned to be held in Korea within a year.

Katayama welcomed Korea’s efforts to engage international investors ahead of its planned inclusion in the World Government Bond Index (WGBI) next month, a move that could affect global bond markets and capital flows.

The ministers reaffirmed the importance of bilateral financial cooperation, including potential currency swap arrangements, and pledged to continue discussions on strengthening regional financial safety nets and rapid communication channels between their finance authorities.

Security concerns were raised about North Korea’s crypto theft and the use of IT personnel that could support weapons programs, which the officials said pose serious international security risks. They agreed to maintain exchanges on measures to counter such threats.

The meeting marked the first Korea–Japan finance ministers gathering since President Lee Jae-myung’s inauguration, and both sides said they would pursue the next meeting in Korea within a year. The forum has been held since 2006 to deepen economic and financial cooperation between the two countries.