"Secretary of Defense James N. Mattis and Minister of National Defence Jeong Kyeong-doo decided to suspend exercise Vigilant Ace to give the diplomatic process every opportunity to continue," the release said.
The determination regarding the Vigilant Ace exercises was made with the participation of Japanese Defense Minister Takeshi Iwaya who assured Tokio's commitment to regional security, the release said.
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The action follows President Donald Trump's decision to halt two other joint drills with South Korea earlier this year.
Trump stressed that the "war games" had to be ceased during the negotiations with North Korean Chairman Kim Jong-un, adding that the drills were "very expensive."
However, the US continued to carry out joint drills in the region with Japan.