Japan will hold talks with Seoul on lifting its controls on exports to South Korea of materials for semiconductor manufacturing, the government said Monday, as momentum built toward mending bilateral ties.

A Japanese trade ministry official said it is the right time to resume talks on the export curbs imposed in 2019, while the South Korean government notified Japan the same day it will suspend a dispute process at the World Trade Organization over the controls.

The steps were taken in the wake of South Korea's announcement Monday of its plan for settling a wartime labor compensation dispute with Japan.

In July 2019, the Japanese government tightened controls on exports to South Korea of three materials -- fluorinated polyimide, resists, and hydrogen fluoride -- used for the production of chips and display screens for smartphones.

Japan has also revoked South Korea's preferential status as a trade partner for the purchase of goods that can be diverted for military use, often referred to as a "white list country."

The removal of South Korea from the list came after the court rulings, which ordered Japanese firms to pay compensation to Korean plaintiffs for forced labor, were delivered.

While Japan insisted 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.

The soured bilateral relations also triggered a move to boycott Japan-made goods in South Korea.

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