Japanese Prime Minister Shinzo Abe on Monday urged South Korean President Moon Jae In to stick to a 1965 bilateral agreement designed to settle all wartime compensation issues amid a lingering dispute over the matter.

Abe and Moon met on the outskirts of Bangkok at a time when bilateral ties have deteriorated to their lowest level in years over wartime labor compensation that has played out in a tit-for-tat trade spat.

It was the first time that the two leaders have held talks since they had a formal one-on-one meeting on the sidelines of the U.N. General Assembly in September last year.

[Photo courtesy of the South Korean presidential office]

During their 11-minute conversation in a waiting room ahead of a summit involving leaders of the Association of Southeast Asian Nations plus Japan, China and South Korea, Abe and Moon agreed on the need to resolve outstanding bilateral issues through dialogue, the South Korean presidential office said.

They reaffirmed the importance of the two countries' ties in their "very friendly and serious" face-to-face meeting, it said.

Speaking to reporters, Japanese Deputy Chief Cabinet Secretary Akihiro Nishimura said Abe conveyed to Moon Tokyo's "basic stance," which means that the issue of compensation was settled by the 1965 agreement, under which it provided Seoul with $500 million in the form of "economic cooperation."

Moon also expressed hope for "substantial progress" in improving ties and proposed a dialogue involving high-level officials, if necessary, the presidential office said.

In response, Abe suggested that the two neighbors make efforts to explore solutions "through every possible measure," the South Korean side said.

However, Nishimura only said Abe has reiterated his position that outstanding bilateral issues should be settled by "exchanges between diplomatic authorities."

(Japanese Prime Minister Shinzo Abe (L), his wife Akie Abe (2nd from L) and South Korean President Moon Jae In (2nd from R))
[Pool photo]

The two leaders also shook hands and chatted with each other during a gala dinner the previous evening.

Late last month, South Korean Prime Minister Lee Nak Yon handed Abe a private letter from Moon during his visit to Japan to attend Emperor Naruhito's enthronement ceremony.

South Korean Foreign Minister Kang Kyung Wha said Moon expressed his openness to talks with Abe in the letter.

But it remains to be seen when the two leaders can hold a formal meeting as Nishimura said Abe and Moon did not touch on the possibility of holding official talks in the future.

Tensions between the neighbors have escalated since October last year when South Korea's top court ordered a Japanese company to pay compensation for forced labor during Japan's 1910-1945 colonial rule of the Korean Peninsula.

The dispute has spilled over into areas of trade and security.

Japan imposed stricter export controls on some key materials needed by South Korea's tech industry, while Seoul has said it will end a military intelligence-sharing pact with Tokyo, which is scheduled to expire later this month.

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