South Korea and Japan are each other's most important neighbors, sharing strategic interests, a draft of Tokyo's annual foreign policy report said Monday.

Japan's ties with South Korea have greatly advanced since last year's bilateral deal to settle the issue of Korean women forced to work at wartime Japanese military brothels, said the draft Diplomatic Bluebook for 2016 obtained by Kyodo News Service.

According to the draft of the Japanese foreign ministry, South Korea is one of the most important neighbors, adding that friendly relations between the two countries are essential for peace and stability in the Asia-Pacific region.

The paper, compiled by the Japanese Foreign Ministry, will be released later this month after the Cabinet of Prime Minister Shinzo Abe approves it.

In December, South Korea and Japan agreed to resolve the "comfort women" issue, a source of a drawn-out dispute between the two countries, "finally and irreversibly" with Tokyo pledging to provide 1 billion yen (US$9 million) for a new South Korean foundation aimed at helping aging former comfort women.

The draft paper said South Korea and Japan have made great advances in bilateral relations.

In 2014, Japan wrote in the annual diplomatic report that "South Korea and Japan share basic values and interests such as liberal democracy and basic human rights." Last year the annual book again merely expressed the term "South Korea is one of the most important neighbors."

But this year's draft contains the term "sharing strategic interests" with South Korea in a move to improve bilateral relations following the landmark deal on Dec. 28.

Nuclear and missile development by North Korea remains a source of concern and threat to the international community, according to the draft, which said Japan will strongly urge the communist country to take concrete actions toward denuclearization.

Tokyo will keep pressing Pyongyang to resolve the issue of North Korea's abductions of Japanese nationals in the 1970s and 1980s, it also said. (Yonhap)