Japanese Foreign Minister Taro Kono has expressed hope that progress can be made towards solving the wartime forced labor issue between Tokyo and Seoul.

This is according to Kyodo News on Tuesday, which said the minister made the remark in consideration of Tokyo's request to Seoul to set up a mediation panel on the forced labor issue based upon a 1965 bilateral agreement.

Japan requested the formation of an arbitration committee last month to discuss South Korea's top court rulings that ordered Japanese firms to compensate Korean forced labor victims during World War II.

Seoul's Foreign Ministry has proposed a joint voluntary fund be established by Korea and Japan to secure compensation funding.

But Minister Kono said his government told Seoul it cannot accept the proposal, maintaining that demanding reparations for forced wartime labor is a violation of international law.