Photo/Illutration Finance Minister Shunichi Suzuki, left, with Choo Kyung-ho, South Korea’s deputy prime minister and finance minister, at the Finance Ministry in Tokyo on June 29 (Provided by the Finance Ministry)

Japan and South Korea agreed to revive a $10 billion (1.44 trillion yen) currency swap agreement last in use around eight years ago to help each other out by supplying U.S. dollars in times of crisis, such as when their own currencies sharply depreciate.

Discussions between the two countries on restoring the accord had languished on the back burner due to the soured state of bilateral relations.

The June 29 decision to revive the agreement speaks volumes about the strides the two countries have made in improving their ties, particularly in the economic field.

Finance Minister Shunichi Suzuki and his South Korean counterpart, Choo Kyung-ho, met at the Finance Ministry in Tokyo on June 29 for the first “Japan-South Korea finance dialogue” in seven years.

Under the agreement, the two countries will each have a mutual supply of $10 billion at their disposal.

If, for example, South Korea makes a request for the swap, the U.S. dollars that Japan holds and the won that South Korea holds will be swapped.

Likewise, the U.S. dollars that South Korea holds and the yen that Japan holds would be swapped if the situation was reversed.

As both Japan and South Korea hold sufficient foreign currency reserves, the revival of the agreement is largely a symbolic move that is testament to the improved state of the bilateral relationship.

The original currency swap agreement between Japan and South Korea came into being in 2001 following the Asian currency crisis of 1997.

The amount of money that could be swapped between the two countries under the original terms of the agreement was expanded to $70 billion at one point.

But as bilateral relations deteriorated, the amount of money that could be swapped gradually shrunk before the pact eventually expired in February 2015.

Ties between the two countries have improved rapidly since the South Korean government announced in March its “solution” to a contentious wartime labor dispute with Japan.

“Dialogue and cooperation between Japan and South Korea have resumed in various areas,” Suzuki noted at a June 29 news conference held after his meeting with Choo. “With this background, we comprehensively considered the situation we are in and decided to revive it (the agreement).”

Despite the upturn in bilateral ties, approval ratings for the Yoon administration in South Korea have stagnated, mainly on the back of social tensions.

Sources in the Japanese government cited the Kishida administration’s “strong wish” to support the administration of Yoon Suk-yeol in deciding to revive the swap currency agreement.

South Korea’s finance ministry described the decision as a “surprise” in a statement.

It stressed the decision was an “achievement” that symbolizes the fact that improved ties between South Korea and Japan now encompass financial cooperation.

Choo has said the decision is “significant as it will normalize and revive economic and financial cooperation between our countries.”

South Korea’s economy is based on importing resources and exporting products it manufactures using those resources.

Thus, it relies heavily on the economic well-being of other countries.

After the global financial crisis in 2008, the won sharply dropped due to a capital outflow overseas.

South Korea has struck currency swap agreements with other countries worth more than $130 billion in total.