South Korean President Moon Jae-in said on Thursday that Japan imposing tighter export curbs against South Korea will undermine Japan's international credibility for using its industrial advantage as a weapon against another country.
"The measures so far undermine the trust of the free trade order and the international division of labor," Moon said.
"Even if there are any gains, it will be short-lived. In the end it is a game without winners, where everyone, including Japan itself, becomes a victim."
Moon's comments came after Japan's industry minister Hiroshige Seko threatening to expand its strict examination on South Korean goods beyond the three chemical materials used for making semiconductors.
He said that Japan does not usually announce each time it grants approval for exports but did so this time after South Korea called Japan's recent restrictions an "embargo" on shipments.
Seko was speaking after Japan granted its first approval for the export of a high-tech material to South Korea since Tokyo imposed tighter curbs in July on three high-tech components used for making chips and displays.
He told a news conference that Japan gave its approval after strict examination but refrained from commenting on details of the exports.
The political disagreement between Seoul and Tokyo stems from an argument about Japan's conduct during the second World War, but it's recently spilled into the economic arena.
— CNBC contributed to this report.