Tokyo Stocks Might Be Influenced by Closely Watched BOJ Policy Decision This Week

Yomiuri Shimbun file photo
Japan and ROK flags

Tokyo (Jiji Press)—Claims against Japanese companies by World War II-era Korean laborers are still overshadowing relations between Japan and South Korea despite progress made since a year ago toward stabilizing ties.

Tokyo and Seoul resumed “shuttle diplomacy,” or mutual visits by the two countries’ leaders, following a summit between Japanese Prime Minister Fumio Kishida and South Korean President Yoon Suk-yeol on March 16 last year.

The improvement in relations between Tokyo and Seoul will “contribute to the strategic interest of Japan,” Japanese Chief Cabinet Secretary Yoshimasa Hayashi told a press conference in Tokyo on Friday.

Hayashi said, “We’ll communicate closely to further solidify and broaden our cooperation,” going into 2025 when Japan and South Korea mark the 60th anniversary of the normalization of diplomatic ties.

The improvement in relations was initiated by the Yoon administration’s announcement on March 6 last year of a plan to have a South Korean foundation pay compensation to Korean plaintiffs in wartime labor lawsuits on behalf of Japanese companies sued by them. Kishida highly appreciated the plan, and he and Yoon met in Tokyo 10 days later.

The two countries later took a series of steps to stabilize ties, including the normalization of their military intelligence-sharing pact, Japan’s removal of strict control on exports to South Korea, the revival of their currency swap agreement and the start of real-time sharing of information on North Korean missiles.

Those moves underscored a drastic improvement in ties between Japan and South Korea which officials and experts have said had tumbled to the worst since the 1965 normalization of diplomatic ties.

Kishida and Yoon had seven summits last year alone. An aide to Kishida said the Japanese leader is planning to visit South Korea sometime after a general election there in April.

Possible events next year will include the release of a new joint declaration about bilateral ties and a trip to Japan by Yoon as a state guest.

Still, the wartime labor issue remains challenging.

A South Korean plaintiff last month received money deposited by Hitachi Zosen Corp. with a South Korean court in a wartime labor suit, the first financial damage to a Japanese company over the issue.

The Japanese government has played down the payment as a special case that will not affect other companies involved given that Hitachi Zosen was the only Japanese company to have deposited funds with a South Korean court over the issue.

But a group of conservative members of Kishida’s ruling Liberal Democratic Party reacted angrily to the payment. The group plans to urge Kishida to take countermeasures, people familiar with the matter said.

During a trip to South Korea in May last year, Kishida said that he feels pain over the wartime labor issue, but stopped short of making a direct apology or expressing remorse, leaving a sense of dissatisfaction among some South Korean people.

If South Korea’s ruling People Power Party fails to win a majority in the April 10 election, the leading opposition Democratic Party of Korea may step up criticism of the Yoon administration’s conciliatory policy toward Japan.

A senior LDP member said that “Japan-South Korea relations should not step back as a result of the election.”