Japanese Prime Minister Shinzo Abe says South Korea's decision to cancel a deal to share military intelligence is damaging mutual trust, vowing to work closely with the US for regional peace.
"We will continue to closely coordinate with the US to ensure regional peace and prosperity, as well as Japan's security," he said, ahead of his departure for the Group of Seven summit of industrialised nations in France.
South Korea said it made the decision because Tokyo downgraded South Korea's preferential trade status, which it said changed the security cooperation between the countries.
Seoul says it will downgrade Tokyo as well, a change that would take effect in September.
South Korea accuses Japan of weaponising trade to punish it over a separate dispute linked to Japan's brutal colonial rule of the Korean Peninsula from 1910 to 1945. Japan denies any retaliation.
Japan has long claimed all wartime compensation issues were settled when the two countries normalised relations under a 1965 treaty.
But South Korea's Supreme Court last year ruled that the deal did not cover individual rights to seek reparations and has ordered compensations for victims of forced labour under Japan's rule.
South Korea's latest decision on military intelligence came as a surprise to many and underlined how much the relations had deteriorated.
The US sees both South Korea and Japan as important allies in northern Asia amid the continuing threats from North Korea and China.
The Pentagon has expressed "strong concern and disappointment" in the collapse of the agreement.
Liberal South Korean President Moon Jae-in has declared that his country would "never again lose" to Japan, although he later softened his tone and said he was willing to talk with Tokyo.
South Koreans have held massive rallies and started a boycott of Japanese products.
Australian Associated Press