Japanese Prime Minister Yoshihiko Noda on Monday held talks with China's president during a visit to Beijing dominated by concerns over nuclear-armed North Korea after the death of Kim Jong-Il.

China is North Korea's closest ally, and President Hu Jintao told Noda he was "ready to make joint efforts with all relevant parties, including Japan, to maintain peace and stability on the Korean peninsula," the official Xinhua news agency reported.

Ties between Tokyo and Beijing have been dogged by economic and territorial disputes, with Japan repeatedly raising concerns over China's widening naval reach and growing assertiveness in the Pacific.

But Kim's death has shifted the agenda to worries about nuclear-armed North Korea, where his untested son Kim Jong-Un appears to be taking the reins of power in the isolated communist state.

Analysts say China holds the key to handling North Korea, where Japan has few ties overall, and fewer still to Kim's son.

Kim's death "should not wrongly affect the peace and stability on the Korean peninsula," Noda told China's Premier Wen Jiabao during Sunday talks, according to a Japanese foreign ministry spokesman.

"Under this situation, the role of China is extremely important."

State broadcaster China Central Television said Wen and Noda had agreed to restart stalled six-party talks on scrapping the North's nuclear programme at an early date.

The six-party talks, chaired by China and also involving the two Koreas, the United States, Russia and Japan, have been at a standstill since December 2008.

The two sides also reached agreements that will make it easier for Chinese and Japanese companies to trade in each other's currencies, rather than using the dollar, as Beijing seeks to increase the use of the yuan in global trade.

They also plan to allow a Japanese government-backed entity to start selling yuan-denominated bonds in China, in line with Beijing's desire to expand the country's financial markets and increase their liquidity.

China retains tight control over the yuan, which is not fully convertible, to prevent large volumes of money suddenly flowing in or out of the country, which authorities fear could destabilise the economy.

China and Japan are still trying to heal diplomatic wounds from a year ago when Beijing reacted in fury over the arrest of one of its fishermen near the islands after he rammed his ship into Japanese coastguard vessels.

During talks with Wen, both sides agreed to set up high-level consultations to discuss maritime affairs, including a thorny territorial dispute in the East China Sea, the Japanese foreign ministry spokesman said.

Meanwhile discussions on a free trade agreement between Japan, China and South Korea will likely begin early next year, the spokesman said, without giving details.

Noda's Democratic Party of Japan, which swept out the long-ruling Liberal Democratic Party in 2009, has largely supported stronger relations with China.

On Monday the Japanese leader expressed gratitude for China's support in the wake of a devastating tsunami in March.

Beijing will "earnestly study" a request to send pandas to a Japanese city that was among the worst hit by the earthquake and tsunami, the foreign ministry spokesman said.

Noda left Beijing after meeting Hu and has now returned to Tokyo.