Asia to join forces against weak yen

Asian countries including Korea and China will form a joint front to clear financial market jitters in Asia stemming from the Japanese yen`s fall against the U.S. dollar.

The Ministry of Finance and Economy said Friday that the vice finance ministers of 13 East Asian countries will meet Sunday in Kuala Lumpur to discuss measures to stabilize Asia`s financial markets hit by the yen`s slide against the dollar.

A ministry official said the meeting will discuss measures to prevent another foreign exchange crisis, like ways to set up a monitoring system over the movement of hedge funds and a network of regional currency swaps. Specific conclusions will be made soon, he predicted.

The government plans to increase the $5 billion swap arrangement that it signed with Japan late last year, and is now working to set up a similar agreement with other countries such as China.

Swap agreement refers to an accord under which central banks of certain countries can deposit each other`s currencies to stabilize their foreign exchange rates.

In addition, the government plans to hold a meeting of the finance ministers of Korea, Japan and China to examine the region`s financial stability and strengthen cooperation ahead of an annual assembly of the Asia Development Bank scheduled for May.

Kwon Soon-Hwal shkwon@donga.com