The call for "full combat posture" by Kim Jong Un came while the United States announced it had seized a large cargo ship for carrying an illegal shipment of coal.
South Korea's economy unexpectedly shrank in the first quarter, marking its worst performance since the global financial crisis.
South Korea announced a proposed 6.7 trillion won ($5.87 billion) supplementary budget on Wednesday to tackle unprecedented air pollution levels and to boost exports bruised by weak external demand amid the Sino-U.S. trade war.
The South Korean city of Gwangju has seen a steady exodus of manufacturing jobs move to low-cost countries. Many job seekers say they would work for the plant in a heartbeat.
U.S. President Donald Trump on Thursday expressed a willingness to hold a third summit with North Korean leader Kim Jong Un but said in talks with South Korean President Moon Jae-in that Washington would leave sanctions in place on Pyongyang.
North Korean leader Kim Jong Un said his country needs to deliver a "serious blow" to those imposing sanctions by ensuring its economy is more self-reliant, state media Korean Central News Agency (KCNA) said on Thursday.
South Korea's President Moon Jae-in has replaced his unification minister in charge of relations with North Korea and appointed a longtime confidant, Moon's office said on Thursday.
Under Kim Jong Un, North Korea has conducted its most powerful nuclear test and launched its first-ever intercontinental ballistic missile.
South Korean President Moon Jae-in's approval ratings have been falling and the prospects of re-starting some inter-Korean projects have dimmed, said Alison Evans of IHS Markit.
South Korea's unemployment rate jumped to a nine-year high in January as more people shunned low-paying work in the face of rising minimum wages, putting further pressure on the economy and deepening policy frustrations for President Moon Jae-in.
North Korean leader Kim Jong Un spoke highly of U.S. President Donald Trump, state media said on Thursday, and expressed satisfaction over the results of talks between officials from both countries about a second summit between Kim and Trump.
South Korea says it hopes North Korean leader Kim Jong Un's trip to China will act as a "stepping stone" for a second summit between Kim and President Donald Trump.
In his New Year address, North Korean leader Kim Jong Un said there would be faster progress on denuclearization if the United States takes corresponding action.
Kim's "letter-like" message to Trump was delivered on Friday through an unspecified channel, South Korea's Chosun Ilbo newspaper, citing an unnamed diplomatic source.
North Korea said it will never unilaterally give up its nuclear weapons unless the U.S. first removes what Pyongyang called a nuclear threat.
As the two Koreas make steady progress toward reconciliation, fears are mounting that peace efforts may overshadow the denuclearization of North Korea.
South Korean President Moon Jae-in has replaced chief presidential policy aide Jang Ha-sung and finance minister Kim Dong-yeon, the two most senior policymakers in charge, his office said on Friday.
The mainland China markets closed lower on the day despite the country's inflation data coming in line with expectations.
North Korea must take steps towards verified denuclearization before achieving the "shared goal" of an official end to the 1950-53 Korean War, a U.S. envoy said on Monday.