It may not carry a significant consequence for Korea and Japan to have decided not to extend their $10 billion currency swap line that is scheduled to expire on Feb. 23. But it is still regretful that they failed to preserve the deal, the last in a series of swap arrangements set up between the two neighboring countries since July 2001.

Announcing the decision Monday, the Finance Ministry here said both sides had agreed that it might be appropriate to allow the accord to expire naturally in light of financial and economic circumstances.

Certainly, both Korea and Japan have hoarded large foreign currency reserves, and their existing swap arrangement may seem unnecessary. It is also true that the bilateral currency swap scheme has never actually been used. Nevertheless, it is unwise to discard a mutually beneficial framework for no sound economic reason.

The scrapping of the last remaining currency deal is yet more evidence that the prolonged diplomatic discord between Korea and Japan over historical and territorial issues is hampering practical bilateral cooperation.

The Seoul-Tokyo swap line, which is designed to strengthen their preparedness for turbulence in global financial markets, reached as high as $70 billion in 2011. Since then, it has been scaled back as bilateral ties have continued to deteriorate. The two sides did not extend swap deals worth $57 billion and $3 billion in 2012 and 2013, respectively.

Tokyo has taken the stance that Seoul’s formal request is necessary for renewing a deal. In response, Seoul officials have refused to ask for an extension in order to avoid giving the impression of seeking favors from Japan. A Finance Ministry official this week summed up Seoul’s position by noting that if a country pushed for the extension of a swap deal too strongly, it could send a misleading signal to the market that it might be in trouble.

In retrospect, Japan should not have raised the currency swap issue in its narrow-sighted attempt to put pressure on Korea in the course of their diplomatic dispute. True, it was Seoul that proposed setting up and expanding the swap arrangement with Tokyo. But in current terms, Korea has no reason to beg Japan for an extension, as it has foreign currency reserves of more than $362 billion and its current account surplus is expected to surpass $90 billion this year.

If anything, the deal with Tokyo is largely a psychological weapon rather than an arrangement with practical effectiveness. Japan might also feel that the bilateral swap scheme is unnecessary, but it would still benefit from the deal, which helps prevent the Korean won from weakening and checks against the growing influence of the Chinese yuan.

Despite the decision not to extend the swap accord, it was the right move for Seoul and Tokyo to agree to resume talks between their finance ministers, which have been suspended since November 2011.

During their upcoming meeting in Tokyo in May, Finance Minister Choi Kyung-hwan and his Japanese counterpart Taro Aso may look into the possibility of forging a new swap arrangement.