Prime Minister in waiting Abdullah Ahmad Badawi today said Malaysia is on course to forge a free trade agreement (FTA) with Japan as it is determined to maintain its "Look-East" policy of learning from the rest of Asia.

"The (FTA) talks are progressing very well," Abdullah told a news conference in Tokyo. "There has been no difficulty."

Abdullah said he expects a "positive" result from a third round of Malaysia-Japan FTA talks in September, involving a study group which has been expanded to include government officials, private-sector representatives and academics.