People take photos of a 'comfort woman' statue set up in front of Japan's consulate building in Busan, South Korea
VON PRESS Asia & Pacific: Japan said on Friday it was temporarily recalling its ambassador to South Korea over a statue commemorating Korean women forced to work in Japanese military brothels during World War Two which it said violated an agreement to resolve the issue.
Tokyo also announced a halt to the ongoing negotiation on a currency swap agreement between the two countries -- an emergency channel of and the postponement of a high-level economic cooperation meeting.
Suga said Japan would postpone bilateral "high-level" economic dialogue and that it was suspending talks on a new currency swap arrangement with South Korea.
"Without building relations of trust, it won't stabilize," Finance Minister Taro Aso reporters, referring to the currency swap arrangement.
Meanwhile, South Korean officials expressed "strong regret" over steps taken by Japan on Friday, including recalling its ambassador, in protest against a statue recently installed at the end of last year by a civic group in front of its Consulate General building in the southern port city of Busan.
"We express our strong regret over the action taken by Japan with regard to the statue," the foreign ministry said in a statement quoted by Yonhap news agency.
"The government wants to make it clear again that both countries should keep advancing their bilateral ties based on trust regardless of any challenging issues," it added.
South Korea's Finance Ministry on Friday denounced the action and said the talks on the currency swap agreement had been suspended due to political reasons.
In particular, the statue in Busan has become a diplomatic thorn between the two countries, as Tokyo has demanded its immediate removal. It is the second such statue installed in front of Japan's overseas diplomatic missions following the one set up before the Japanese Embassy in Seoul.
A local district office first rejected the civic group's request to place the statue, but later allowed for its installment in the face of a strong public outcry, Yonhop reported.
The term "comfort women" is a euphemism for girls and women, from South Korea, China, and the Philippines and elsewhere, forced to work in Japanese military brothels. South Korean activists estimate that there may have been as many as 200,000 Korean victims.
In 2015, South Korea and Japan reached a deal in which Tokyo expressed apology and agreed to provide 1 billion yen (US$10.28 million) for a foundation aimed at supporting its surviving victims.
The decision was hailed by the international community as a step in the right direction given that the comfort women issue has been a long-standing obstacle to ties between the two neighboring countries.