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For his part, Abe said: "Japan and China play an irreplaceable role in the economic development of Asia and even the world" and both sides should work together to "promote world peace and prosperity", according to CCTV.

Prime Minister Shinzo Abe held a second meeting with his Chinese counterpart Li Keqiang on Friday during the first formal visit to Beijing by a Japanese leader in almost seven years that heralds warming ties following years of acrimony.

Japanese Prime Minister Shinzo Abe, left, talks with Chinese President Xi Jinping, right, during a meeting at the Diaoyutai State Guesthouse in Beijing, China, Oct. 26, 2018. For Tokyo, these bilateral talks showcase Japan's commitment to diplomacy, deepen economic engagement with China, and build multilateral trade by accelerating both the Regional Comprehensive Economic Partnership (an alternative to TPP) and trilateral negotiations between for a South Korea, Japan, and China free-trade agreement.

Japan's relationship with China is at a "historic turning point" as the countries signed a series of agreements on Friday, although decades of historic tension still remain with Japan still critical of China's human rights record.

The two Asian leaders displayed a united front on free trade as Xi called on Abe to join hands with China in upholding multilateralism and an open world economy.

"China and Japan, as close neighbors with great converging interests, are major world economies and influential countries", Xi said.

This will be PM Modi's third visit to Japan since 2014 for the annual bilateral summit and his 12th meeting with Mr Abe.

Both sides signed a currency swap agreement of up to 3.4 trillion yen ($US43 billion), effective until 2021.

Abe's visit is expected to promote mutual trust and it would provide a foundation "for conquering the difficulties in bilateral relations", said Kazuya Iwamura, commentator from Kyodo News. Although Japan's alliance with the USA keeps the nation in lockstep with Washington on most geopolitical issues, Abe has moved to shore up economic ties with China - its biggest trading partner. "In other words India, Japan plus one", said Gokhale.

Tensions over territorial disputes in the East China Sea have always been a key source of friction between the two countries. It follows Japan's previously foreshadowed decision to stop providing China with official development assistance, which Abe argued had "completed its historical mission" over the past 40 years.

"(Japan) is determined to settle the abduction, nuclear and missile issues as well as the unhappy past and normalize diplomatic relations (with Pyongyang)", Prime Minister Abe said. "Between the two countries for more than 70 years is not concluded a peace Treaty", said Prime Minister of Japan.

The improved relations between China and Japan have also benefited the latter's film industry.

Mr Abe's current trip to China is the first visit by a Japanese head of government in seven years.

But he has since softened his rhetoric as the issue of North Korean denuclearisation brought the two countries closer, with Abe calling on China to put pressure on North Korea.

During his two-day visit to Japan, Mr. Modi will also meet with the Indian community in Tokyo, and attend a business leaders event, before leaving for India on October 29.