Mikio Sasaki, who leads the Japanese delegation, said the two countries must expand exchanges to improve their bilateral relationship.

"Both countries need to work on restoring political, diplomatic ties," he said.
The economic relations between Seoul and Tokyo have been sharply deteriorating in recent months amid the escalating trade tussle.

In July, Tokyo abruptly announced steps to regulate exports of key materials to South Korea, which was widely seen as retaliation against Seoul's Supreme Court rulings last year ordering Japanese firms to compensate Korean victims of forced labor during Japan's brutal 1910-45 colonial rule of the Korean Peninsula.

The two countries then removed each other from their respective lists of trusted trade partners granted preferential treatment in export procedures. Earlier this month, South Korea filed a complaint with the World Trade Organization over Japan's export curbs.

Yoo Myung-hee, South Korea's trade minister, said Seoul is willing to resolve the issue with dialogue. Japan recently accepted South Korea's offer to hold a bilateral consultation over Seoul's WTO complaint.

"The current situation is not right because we're seeing bilateral economic exchanges and cooperation being limited and supply chains shaking," Yoo said at the gathering. "The South Korean government will carry on diplomatic efforts to improve bilateral relations and will support economic cooperation."

The 51st edition of the Korea-Japan business conference will end Wednesday, with delegations from South Korea and Japan scheduled to make a joint statement. (Yonhap)