Japan is considering suspending a currency swap contract it signed with Korea, Japanese media reported Wednesday.
The move came after Korean President Lee Myung-bak demanded that Japan's emperor apologize for the Japanese colonial rule of Korea (1910-1945).
On Tuesday, Lee said the Japanese emperor should sincerely apologize for Japan’s colonial rule of Korea, if he wants to visit Seoul. On Aug. 10, Lee visited Dokdo islets, which sharply raised tensions between Seoul and Tokyo.
It was the first time that a Korean president has ever visited the islets lying in the East Sea between the Korean Peninsula and Japan.
Tokyo has long laid claims to Dokdo. Korea has kept a small police detachment on the islets since 1954.
Osamu Hujimura, Japan’s chief cabinet secretary, did not rule out the possibility of Japan suspending the Seoul-Tokyo currency swap contract, according to the report.
“There could be a lot of reviews (on the matter),” he said in a news conference in Tokyo.
In a summit meeting in October last year, President Lee and Japanese Prime Minister Yoshihiko Noda agreed to expand the size of currency swap contracts between the two countries to $70 billion from $13 billion in an attempt to stabilize the foreign exchange market.