Japan, ASEAN agree on steps to boost financial cooperation

Finance ministers and central bank governors from Japan and the Association of Southeast Asian Nations agreed Friday on measures to enhance financial cooperation at their gathering on the sidelines of the Asian Development Bank's annual meeting in India.

As Japan looks to deepen economic ties with the fast-growing Southeast Asian economies, it agreed to revive bilateral currency swap agreements with Malaysia, Singapore and Thailand, and to strengthen existing bilateral agreements with Indonesia and the Philippines.

The arrangements are aimed at supplementing the Chiang Mai Initiative -- a safety net designed to address short-term liquidity problems in the event of a crisis.

Finance ministers from Japan and 10-member ASEAN last held talks in 1999. The meeting held in Greater Noida on the outskirts of New Delhi was the first attended by central bank chiefs.

"ASEAN is the region on which Japan needs to place the biggest importance down the road" given that the region's economy will grow further in the future, Japanese Finance Minister Taro Aso said at a press conference following the meeting.

Among other financial cooperation, the Japan and ASEAN finance chiefs agreed to promote the use of local currencies by Japanese companies operating in ASEAN countries, and on the Japanese Finance Ministry's purchase of bond exchange-traded funds in emerging Asian economies to boost bond markets in the region.

Japan will also offer assistance for the reform of financial systems in such countries as Vietnam and Myanmar.

To achieve tangible progress on financial cooperation, Japan agreed with Indonesia, Malaysia, Singapore, the Philippines and Thailand to set up bilateral working groups.

ASEAN comprises Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.