TOYAKO - THE leaders of the United States and Japan, the world's two largest economies, agreed on Sunday that urgent efforts are needed to tackle surging oil and food prices, Japan's prime minister said.

The call to action came as leaders of the Group of Eight (G8) world powers huddled in this mountain resort in northern Japan to discuss ways to bolster the global economy in the face of the surge in commodity and food costs.

High oil and food prices 'are having a negative impact on the world economy,' Japanese Prime Minister Yasuo Fukuda told a joint press conference.

'We agreed there's a need for swift efforts on these fronts.' Oil prices struck record peaks above US$146 (S$198.72) dollars last week, up five-fold since 2003 amid supply worries and rising demand in emerging economies.

The higher cost of fuel and food has led to protests worldwide, from tens of thousands of truck drivers striking in Spain and Portugal, to street rallies in Asia and riots in Egypt and Haiti.

Japanese press reports have said the G8 - Britain, Canada, France, Germany, Italy, Japan, Russia and the United States - may agree to create a system of food reserves much like emergency oil stockpiles. -- AFP