(Bloomberg) -- Japan and South Korea agreed to seek ways to bolster their currency swap deal in an effort to address persistent weakness in both the yen and won that has exacerbated inflationary pressure via import costs.

The $10 billion swap agreement that was put in place last year strengthens financial stability in both countries, South Korea said in a statement on Tuesday after Finance Minister Choi Sang-mok and his Japanese counterpart, Shunichi Suzuki, met in Seoul. The two nations had agreed to restore the deal in Tokyo last year after an eight-year hiatus.

While Tuesday’s statement didn’t say how the swap deal could be enhanced, it said the two ministers “shared serious concerns about the depreciation of their currencies in particular and agreed to continue to take appropriate measures.”

The yen and the won have been among the world’s worst-performing currencies this year as receding expectations for a rate cut by the US Federal Reserve ensured that interest rate differentials would continue to buoy the dollar.

Authorities in Japan and South Korea have warned repeatedly they would intervene if necessary to curb excessive volatility in foreign exchange markets. Japanese Vice Finance Minister Masato Kanda said Monday that the government was ready to step into the market at any time around the clock if needed.

Japanese authorities have acknowledged that they already spent a record ¥9.8 trillion ($61.5 billion) to support the yen over the course of a month-long period from late April. While they haven’t confirmed the precise timing for the actions, trading patterns indicate they stepped into the market on April 29 not long after the dollar touched a 34-year high of ¥160.17 and again on May 1.

The yen was trading late Tuesday around 159.50 to the dollar. 

South Korea’s central bank and finance ministry agreed last week with the national pension fund to expand the size of a currency swap deal, seeking to help ease supply-demand imbalances in case of market instabilities.

Korean authorities issued a rare joint statement to warn against the currency’s weakness in April when the won briefly touched the 1,400 per dollar mark. The jawboning was followed by another government statement outlining comments from Choi and Suzuki in Washington, in which they expressed “serious concerns” over the recent weakening of their currencies.

The Korean won closed at 1,387.40 on Tuesday.

Tuesday’s bilateral talks were the first in eight years that the finance chiefs of the two sides convened in the South Korean capital, signaling a further thawing of diplomatic relations.

The statement from the Finance Ministry added Japan welcomed South Korea’s efforts to join the FTSE World Government Bond Index and reform foreign exchange markets by extending the won’s trading hours from July 1. Korean authorities have increased efforts in recent years to court foreign investors and improve market access as the country seeks to get its stocks and bonds added to global developed-market indexes.

Currency stability is important to both Japan and South Korea. In addition to relying on energy and food imports, the nations also have major manufacturers that derive a large share of their earnings from exports. Local and foreign investors are also impacted by currency fluctuations that can inflate or erode the value of their overseas assets.

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