A Japanese daily says Japan has given up on its plan to begin free trade talks with South Korea and China this year due to strained diplomatic ties with Beijing.

The Sankei Shimbun reported that Tokyo has decided to work toward starting FTA talks early next year as coordinating differing opinions has been tough amid the territorial dispute over the Senkaku Islands between China and Japan. The islands are known as Diaoyu in Chinese.

South Korea, China and Japan were scheduled to declare the start of negotiations on their trilateral free trade agreement during the Association of Southeast Asian Nations (ASEAN) Summit opening in Cambodia on Sunday.

The three countries agreed to launch the talks within the year back in May during a trilateral summit meeting in Beijing.