TOKYO (Reuters) - Japanese Finance Minister Jun Azumi said on Saturday Japan would hold high-level talks with China over contributions to the International Monetary Fund to help ease the euro zone debt crisis ahead of a G20 finance leaders' meeting in Washington.

The two nations have not yet decided whether to increase contributions to the IMF after the euro zone expanded its bailout capacity last month, Azumi told reporters after meeting his Chinese counterpart, Xie Xuren.

"Europe's problem has eased from a critical situation seen last year but it is not a situation where we can be optimistic. We need to watch the situation cautiously," Azumi told reporters.

"As for contributions to the IMF, we will hold high level talks towards the G20 meeting in Washington."

The European Union expects G20 leaders to agree to contribute more money to the IMF this month after Europe expanded its own bailout capacity to 700 billion euro from 500 billion.

Azumi also said he wants Japan and China to lead the global economy this year and Japan's economy will be able to achieve its goal of real growth rate of about 2 percent this fiscal year.

"It is Asia's economy that has to lead the global economy. Especially, the economies in Japan and China need to achieve steady improvement," Azumi said.

"The nation's domestic demand is improving considerably thanks to reconstruction demand," he added, referring to Japan. "There have been various factors such as a strong yen and higher oil prices, but Japan's corporate fundamentals are not bad."

(Reporting by Kaori Kaneko; Editing by Ron Popeski)