After years of near neglect, Japan is now eager to cozy up to Brazil -- by far the largest Latin American economy.

In its attempt to shore up the flow of trade and investment across the Pacific, the government is also wooing MERCOSUR -- the Brazil-led regional customs union.

According to government sources, Japan and Brazil will agree next month to set up a joint dialogue forum of high-level government officials and private-sector business leaders to discuss ways to strengthen bilateral economic ties.