Japan and the European Union agreed yesterday to allow the free flow of data between their economies, paving the way for a free-trade deal that comes into effect next month.

Both sides formally recognized the strength of each other's data protection safeguards, agreeing that these were on a par with their own measures.

The so-called "adequacy decision" allows businesses to transfer data between Japan and the EU, while offering consumers similar levels of data protection to those enjoyed domestically.

"This adequacy decision creates the world's largest area of safe data flows," EU Justice Commissioner Vera Jourova said.

"Europeans' data will benefit from high privacy standards" in Japan, she added, noting that EU companies would now have access to 127 million consumers in Japan.

Ahead of yesterday's decision, Tokyo took steps to bring its data protection standards in line with the EU, ensuring among other things that any use of personal data for national security and criminal law enforcement would not go beyond what is necessary.

Many Europeans worry about data security amid regular reports of data breaches and scandals, such as last year's revelations around the improper use of personal information that Facebook had shared with the Cambridge Analytica data analysis firm.

Last year, the bloc tightened its data protection rules to give citizens more control over the use of their personal information.

The EU-Japan free-trade agreement - the largest ever negotiated by Brussels - will create a combined market of around 600 million people when it comes into force on February 1. Japan is the world's third-largest economy, behind the United States and China.