Japan on Thursday eased export controls of chipmaking materials on South Korea in response to Seoul's decision to retract its complaint with the World Trade Organization over the matter, the industry ministry said.
The move came as Japanese Prime Minister Fumio Kishida and South Korea President Yoon Suk Yeol held talks last week in Tokyo, in the latest sign of improving bilateral ties.
South Korea's industry minister Lee Chang Yang was quoted by South Korean media as saying the process to withdraw its complaint with the WTO will be completed within this week.
In July 2019, the Japanese government tightened controls on exports to South Korea of three materials -- fluorinated polyimide, resists, and hydrogen fluoride -- used in the production of chips after bilateral ties worsened over wartime labor and other issues.
The two countries have also removed each other from their lists of so-called Group A countries, formerly known as "white list countries," entitled to receive minimum restrictions on purchasing goods, such as electronic components, which can be diverted for military use.
Yoon instructed his government earlier this week to begin procedures to relist Japan. Japanese industry minister Yasutoshi Nishimura has welcomed the move and said he would keep an eye on developments.
Bilateral ties had hit their lowest point in decades after South Korea's Supreme Court in 2018 ordered two Japanese firms to compensate Korean plaintiffs for alleged forced labor during Japan's 1910-1945 colonial rule of the Korean Peninsula.
While Japan said the export controls were based on security concerns, South Korea viewed the measures as retaliation against the court rulings and filed a complaint against the export restrictions with the WTO.