The Finance minister of Japan Jun Azumi on August 17, 2012 said that he was cancelling his trip to South Korea. Azumi suggested the reviewing the bilateral currency swap deal.

The finance minister in a press conference said, “We must not overlook (Lee’s) remarks that utterly lack due respect and rub the Japanese public sentiment the wrong way”. Jun was referring to the South Korean President Lee Myung Bak’s remarks that Emperor Akhito must apologise for Japan’s warmongering past if he wanted to visit South Korea also cause anger.

The finance minister also said that it was difficult to separate the economic issues from the political dispute and added, “I felt the timing of my visit to South Korea is not appropriate.” According to the current currency swap deal, the two nations can exchange up to $70 billion worth of US dollars, Japanese yen and South Korean won.

This was a scheme which was designed to avoid financial crisis. Azumi also said that every aspect has to be first considered before they decided whether to extend the level of the swap agreement or not. Japan will be considering a decision to expand the foreign exchange swap deal with South Korea amidst the tensions over the disputed island chain which has strained the diplomatic relations.