Japan's ties with its neighbours have long been plagued by their bitter memories of Tokyo's past military aggression and two-way feuds still rankle, but the focus at summit of the North Asian leaders was on cooperation rather than feuds.

'Cooperation between ... our three countries to overcome difficulties will have real significance as the financial crisis has a big impact on economies around the world,' Chinese Premier Wen Jiabao told Japanese Prime Minister Taro Aso. They were later joined by South Korean President Lee Myung-bak.

In a statement issued after the talks, the three leaders confirmed the importance of steps to expand demand in their struggling economies, pledged not to create new trade barriers over the next 12 months and backed efforts to bolster a regional web of currency swaps.

They also called for quick action to set up a regional financial crisis fund, expanding the Chiang Mai Initiative of 2000.

The three Asian powers along with the 10-nation Association of Southeast Asian Nations (Asean) had in October agreed to create an US$80 billion (S$119 billion) joint fund by next June to avert regional financial turmoil.

The fund would supercede the Chiang Mai Initiative, a system of bilateral currency swaps set up after the 1997-98 Asian financial crisis.

Japanese Prime Minister Taro Aso, Chinese Premier Wen Jiabao and South Korean President Lee Myung-Bak in a joint statement after a summit 'reiterated their commitment to work with ASEAN members to expedite the process of the Chiang Mai Initiative multilateralisation'.

The summit among the leaders of the three North Asian countries, which account for 75 percent of the region's economy and two-thirds of its trade, follows the collapse of a bailout for U.S. auto makers that sparked sell-offs in global stock markets and sent the dollar to a 13-year low against the yen.

On Friday, Seoul - whose economy has been the worst-hit among the three countries - agreed new currency swap deals with Tokyo and Beijing worth the equivalent of nearly US$50 billion, the latest effort to stabilise an economy the central bank says is set for its slowest growth in over a decade .

Island feuds
South Korea, whose won currency has lost about one-third of its value against the dollar this year, has offered US$130 billion in measures to shore up its banking system and another US$25 billion in fiscal spending and tax cut plans to try to prevent a recession in its export-driven economy.

Its central bank has slashed interest rates to a record low, while promising to do more if needed.

Japan announced on Friday that it would expand its stimulus plans and bolster a war chest for bank rescues to US$131 billion, but kept markets guessing on whether Tokyo would intervene to stop a surging yen from pushing the economy deeper into recession.

China, threatened with a slowdown in its dynamic economy, launched a 4 trillion yuan (S$871 billion) stimulus plan on Nov 9 and on Wednesday pledged to boost public spending and cut taxes to reach growth goals.

China is targeting growth of about 8 percent next year but will have to contend with a host of potential challenges from deflation to capital outflows, the country's banking regulator said on Saturday.

Despite Saturday's show of unity, bilateral feuds still niggle. As the summit began, a small group of Japanese right-wing activists gathered near Fukuoka City Hall to protest the meeting and demand the return of disputed territory.

Mr Aso told Wen the intrusion of two Chinese survey ships into waters near disputed islands in the East China Sea which are thought to lie near potential oil and gas reserves was very regrettable and urged Beijing not to let it happen again so as not to damage overall Sino-Japanese ties.

Mr Wen reiterated that the territory belonged to China but added the matter should be resolved through dialogue.

Mr Lee and Mr Aso steered clear in their two-way talks of a long-running dispute between South Korea and Japan over another remote crop of islets which lie near fertile fishing grounds and possible maritime deposits of natural gas hydrate that could be worth billions of dollars .

Sino-Japanese relations have warmed since the deep chill when Junichiro Koizumi, Japan's prime minister from 2001-2006, offended Beijing with visits to a Tokyo war shrine.

South Korea's Lee pledged on taking office in February to improve frosty ties with Japan.

Leaders of the three countries will meet next year in China. -- REUTERS, AFP