Japan and South Korea agreed Tuesday to resume dialogue between their finance authorities, in the latest sign of improving bilateral relations frayed over wartime history.

The agreement came during a meeting between Japanese Finance Minister Shunichi Suzuki and his counterpart Choo Kyung Ho in Incheon, northwestern South Korea. The two countries held their first formal finance ministerial talks in seven years.

Japanese Finance Minister Shunichi Suzuki (R) and his South Korean counterpart Choo Kyung Ho shake hands as they meet for talks in Incheon, South Korea, on May 2, 2023. (Kyodo)

"The two nations are engaged in summit-level dialogue proactively so it's important that finance-track talks also proceed," Suzuki told reporters, adding that the finance authorities will meet "at an appropriate time."

Masato Kanda, vice finance minister for international affairs, will visit South Korea to work out details in June, according to Suzuki.

The finance dialogue is a framework for senior officials from the two nations to discuss economic and financial issues and was previously held in 2016.

In March, South Korea made a proposal to resolve the issue of Japan's compensation for wartime Korean laborers, helping improve ties that had hit their lowest point in years over the labor issue and others related to Japan's 1910-1945 colonization of the Korean Peninsula.

Choo welcomed the recent improvement in mood between the two nations, which share universal values and promote free trade.

"We need to strengthen cooperation between financial authorities on the recent emergence of geopolitical risks and supply chain instability," Choo said at the outset of the meeting with Suzuki.

The meeting was held on the fringes of gatherings related to the Asian Development Bank this week.

In a separate meeting, the finance ministers and central bank governors of Japan, China and South Korea agreed to strengthen cooperation to ensure economic growth following the coronavirus pandemic, minimize its lasting negative effects and prepare for future shocks.

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