East Asia’s three biggest economies vowed today to work together to help prevent market instability as tensions run high over Pyongyang’s weapons programmes. North Korea’s efforts to develop an arsenal of nuclear- armed missiles have fuelled concerns among its Asian neighbours and led to threats of military action from Washington, as well as calls for China to rein in its reclusive ally. Financial markets have been rattled by the events which have hit investor sentiment, and on Friday finance ministers and central bank governors from China, Japan and South Korea affirmed their cooperation in the face of future uncertainty.
“We will continue high degree of communication and coordination among China, Japan and Korea to cope with possible financial instability in the context of increased uncertainty of global economy and geopolitical tensions,” a joint statement said. The three-way talks were held on the sidelines of the Asian Development Bank’s annual meeting in Yokohama, southwest of Tokyo. Financial ministers and central bank governors of the 10 -strong Association of Southeast Asian Nations (ASEAN) were also attending the ADB gathering, which began on Thursday.
In a separate meeting with ASEAN countries, Japan today proposed to create a new currency swap arrangement worth 4 trillion yen (USD 36 billion) in case the region faces a financial crisis. A swap is a useful device in times of economic stress, when normal foreign exchange markets can seize up. “The yen is a stable currency and can work effectively for the stability of financial markets,” Japanese Finance Minister Taro Aso told reporters, according to public broadcaster NHK. Participants responded positively to the proposal, NHK said. Since the onset of the Asian currency crisis in the late 1990s, Japan has spearheaded efforts to build a multilateral currency swap agreement.