Japan and South Korea agree to mend ties after leaders’ first talks in more than a year

Japanese Prime Minister Shinzo Abe and his South Korean counterpart Lee Nak-yon have agreed that they must work to ease the feud between the two countries that has spilled over into trade and security after their highest-level meeting in more than a year.

Both sides issued statements expressing a desire to repair ties after a roughly 20-minute meeting between the two leaders. Lee delivered a letter to Abe from South Korean President Moon Jae-in that, according to the Yonhap News Agency, described Japan as a valuable partner in securing a lasting peace with North Korea and urged efforts to resolve the their disputes.

“It’s important that relations must not be left in their current state,” Abe told Lee, describing them as “very severe”, according to a statement from the Japanese Ministry of Foreign Affairs. Lee urged Abe to continue communications and exchanges, South Korea’s foreign ministry said separately.

The meeting is the most positive signal since South Korean courts issued a series of rulings last year backing the claims of people forced to work for Japanese companies during the country’s 1910-45 occupation of the Korean peninsula. Japan argues all compensation claims were settled by a 1965 treaty that established ties between the two countries. Moon has said the US-brokered agreement did not take into account the emotional suffering of the victims of Japan’s occupation.

There was muted market reaction in both countries. Japan’s benchmark Topix Index maintained a gain of 0.4 per cent while South Korea’s Kospi Index remained little-changed with shares of Samsung Electronics down 0.8 per cent.