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Japan has rejected a South Korean proposal to set up a joint fund to compensate wartime forced labourers. Japan claims the proposed fund would not solve the issue, terming it unacceptable. Chief Cabinet Secretary Yoshihide Suga said, Japan will continue to urge South Korea to agree to arbitration.

Relations between the two nations have been strained by a series of rulings from South Korean courts ordering Japanese firms that used wartime forced labour to compensate victims. 

Japan's government and the firms have rejected the rulings. Tokyo said the issue was settled when the two countries normalised relations.

Last month, Tokyo proposed arbitration on the issue under an agreement signed by the two in 1965. The agreement calls for the two to set up an arbitration panel if  a dispute is not resolved through diplomatic negotiations. 

South Korea offered a counterproposal yesterday that would see South Korean and Japanese firms set up a voluntary fund to compensate victims.



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