PARIS (AP) _ Japan and France urged industrialized nations Thursday to develop a new framework for cooperation on currency exchange, saying such reforms were needed to stabilize world financial markets.

``The further stability of foreign exchange markets is of key importance not only to each of our economies, but also to the entire world economy,'' Japanese Prime Minister Keizo Obuchi and French President Jacques Chirac said in a joint statement.

They stopped short of proposing a formal linking of the dollar, the yen and the euro, the single currency launched Monday by 11 European nations.

France and Japan are among countries calling for a system to stabilize currency exchange in order to guard against radical fluctuations such as those that have devastated Asian and Russian economies.

The joint statement came at the close of talks between Chirac and Obuchi, on the first full day of a state visit to France. The Japanese prime minister was also going to Italy and Germany in visits aimed at restoring confidence in Japan's efforts to pull out of a recession.

Chirac and Obuchi also called for an international conference of the world's biggest economies in Paris later this year to develop reforms of the international financial system.

Chirac said Japan and France will have the chance to discuss further plans for reforms at a meeting of the G-7 group of most industrialized countries in Cologne, Germany in March.

``We must improve the rules governing the global market,'' they said in their statement, adding that ``all countries and people'' should benefit from globalization of the economy.

Obuchi earlier told French industrialists that Japan, Europe and the United States should work together to bring about a stable international monetary system.

Burying earlier skepticism, Obuchi welcomed the euro.

``The birth of the euro brings, without doubt, a great chance,'' the prime minister said at a lunch with French industrialists.

``Tripartite cooperation between Japan, Europe and the United States would allow for creation of a stable and developed international monetary system,'' he said.

``It is in this direction that we must cooperate.''

Obuchi stressed the benefits of closer cooperation between euro zone countries and Japan, expressing the wish that protectionism not hinder such an opening.