South Korea and Japan have agreed to expand economic and financial cooperation at a finance ministers meeting in Tokyo, the government said Saturday.

The talks between Choi Kyung-hwan and his Japanese counterpart, Taro Aso, mark the resumption of bilateral dialogue that had been suspended since November 2012 and allowed the two neighbors to exchange views on a host of outstanding issues, the finance ministry said.

The trading partners had been holding annual meetings since 2006, but fraying relations triggered by Japan’s move to deny its colonial and wartime atrocities put an end to the talks.

In the joint press release, the two sides said they touched on global and regional economic conditions and other developments affecting the two countries.

“In the talks, Choi and Taro concurred on the need to use the dialogue channel to expand mutual understanding and exchange views on policy measures being taken,” the ministry said.

It said the policymakers said while the financial markets of the two countries remain stable, there is a need to formulate policy measures that mitigate unexpected shocks. It said the two finance ministers were in agreement that sharing information on macro-prudential policy and capital flow management measures would be helpful in managing broad economic plans.

The ministry said the two men shared the view that the global economy is recovering gradually but downside risks exist that pose challenges to both South Korea and Japan.

“The officials said there is a need for close coordination in macroeconomic policies,” it said. “The two officials emphasized the importance of pushing forward reforms critical for sustainable growth and concurred on the need to share policies in regards to rapid population aging, low birthrates, and problems facing small and medium enterprise.”

The ministry said South Korea and Japan can look into the possibility of working together when making inroads into foreign markets, the joint release said.

It then said Choi and Taro reached an agreement on working more closely in the Group of 20 and ASEAN-plus-three, as well as the ongoing talks to forge a free trade agreement among South Korea, Japan and China.

Besides the ministerial talks working-level official from the two ministries held a meeting to review such matters as macroeconomics, fiscal policy, taxation, customs, bonds and international finance.

The ministry, meanwhile, said that in talks held late Friday, Choi said there is a need to separate economics from politics and called for closer ties. He then urged both governments to do more to facilitate private business sector cooperation.

The meeting comes as the two countries mark the 50th anniversary of the formalization of diplomatic ties in 1965 and the first time that a deputy prime minister level official has visited Japan since relations soured.

The next finance ministers meeting will be held in South Korea in 2016. (Yonhap)