The diplomatic conflicts between Korea and Japan are spreading into the economy and the Korean wave. The Japanese government has decided to reconsider the currency swap agreement that the heads of both countries agreed on last year, and Japanese companies are canceling orders for products related to Korea.

A Korean TV drama, which was scheduled to air in Japan, was postponed when one of the actors in the drama took part in a relay swim to Dokdo. Now people in the industry are concerned that the diplomatic conflicts may intimidate the Korean wave.

On August 16, The Yomiuri Shimbun reported, "The Japanese government is considering reviewing the currency swap agreement as a response to President Lee Myung-bak's visit to Dokdo and his request for the apology from the Emperor of Japan."

Korean and Japanese sources stated in a phone conversation with The Kyunghyang Shinmun, "Some from within the Japanese government are claiming that the government's lukewarm responses to Korea's actions have contributed to the situation." and that, "There's a strong sentiment that this time they should speak through their actions."

The Korea-Japan currency swap agreement was discussed last October at a summit meeting between Prime Minister Noda Yoshihiko and President Lee Myung-bak. The agreement would increase the amount of currency the two countries could provide each other in a financial crisis from 12 billion dollars to 70 billion dollars.

If Japan decides to respond by reducing the amount of the currency swap, it may strike a blow at Korea, which is vulnerable to financial crises.

A decrease in the business activities of both countries is already becoming a reality. Japan's Sumitomo Mitsui Card had planned to issue a prepaid card for Japanese tourists in September. They worked in alliance with Korea's SK Card, but considering the current deterioration in the relations between the two countries, they have postponed it to the end of this year.

Japan's satellite TV, BS Nippon and BS Japan decided to postpone the airing of "A Man Called God," starring Song Il Gook. BS Nippon and BS Japan had planned to air the first episode on August 21 through satellite broadcasting, but they explained there were concerns of complaints pouring in from the viewers if they aired the drama starring Song Il Gook, who took part in a swim to Dokdo on Liberation Day.

An executive of a Japanese newspaper forecasted, "This decision can start a chain reaction in other networks airing Korean dramas. K-pop performances and events can also be influenced."

Contrary to Japan, the Korean government apparently does not plan to heighten the diplomatic conflicts with Japan any further.

On August 16, a senior official from Cheongwadae took a step back and explained President Lee's request for an apology from the Japanese Emperor, "It was not a preplanned statement. In the process of answering a question, the President just suggested that in principle that is what the Emperor would have to do before he visits Korea.

Apparently, Japan expressed regrets because there was some misunderstanding." However, he added, "Right now, the two countries may clash and the sentiment of the people in both countries may flare up, but putting it off and trying to bury it is not a fundamental solution."