Japan hopes land dispute with China won’t hurt finance ties

Japan is hoping the recent flare-up in friction with China will not damage the two Asian economic powers' cooperation in international finance, a finance ministry official said on Wednesday.

The relationship with Beijing is too important to be derailed by recent antagonisms over disputed islands in the East China Sea, said Takehiko Nakao, a vice minister for finance

Violent anti-Japanese protests erupted in China recently in one of the worst flare-ups over conflicting claims to the islands called Senkaku in Japan and Diaoyu in China. Though Chinese authorities have quelled the demonstrations, the two sides have continued to trade angry accusations. A Wall Street Journal report said representatives of several major Chinese state-run banks were cancelling plans to attend the annual meetings of the International Monetary Fund and World Bank in Tokyo next week.

"It's really disappointing. I was really sorry to hear that," said Nakao. But he said Japan has had no news of any cancellations by Chinese government officials.China's government and business offices are closed this week for a national holiday.

Nakao said he hoped the problems would not spill over into the two country's financial relationship, which has progressed toward boosting use of the Chinese and Japanese currencies instead of the U.S. dollar for international trade. The two sides also have agreed on mutual purchases of government bonds by each side.

"There has been trust and good cooperative relations ... and my strong belief is that we should continue to do this," he said. Along with the IMF and World Bank meetings, finance ministers of the ``Group of Seven'' major industrial economies also will meet in Tokyo, Nakao said.

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