Japan is considering ending a $10 billion currency swap agreement with South Korea later this month, sources close to the matter said Saturday, Kyodo News Agency reported.
Tokyo is expected to announce next week that it will not extend the currency swap contract with Seoul, which is set to expire Feb. 23.
Finance Minister Taro Aso indicated last October that Japan would not extend the arrangement unless requested by South Korea.
The contract, under which each country can obtain dollars by giving its currency to the other, was expanded in 2011 to $70 billion from $13 billion to ensure South Korea had access to sufficient dollar funds to withstand financial market instability amid the eurozone sovereign debt crisis.