The European Union called on Japan on Tuesday to set up an independent regulatory body to promote competition in its telecommunications market, Foreign Ministry officials said.

The regulatory body should take steps to control dominant carriers in the Japanese market, the EU proposed during working-level talks on deregulation held at the ministry, the officials said.

The EU also called on Japan to step up deregulation in other fields, including finance, medicine and employment. The EU said it and Japan should promote dialogue with the aim of protecting the stability of international financial activities by securing the health of Japanese banks.

Japan also put forward deregulation demands to the EU, the officials said.