Japan and South Korea rescinded each other's favoured export partner status on Friday and Seoul said it would review a military information agreement, as a long-running row between the US allies hit a new low.
The two countries -- both democracies and market economies -- are mired in long-running disputes over the use of forced labour during World War II.
Tokyo, which made the first move despite US calls for both to calm tensions, insisted it was acting on national security grounds rather than retaliation.
"The government at a cabinet meeting today approved a revision to the export control law", Japan's Trade Minister Hiroshige Seko told reporters, referring to a so-called "white list".
"South Korea, the only Asian nation on the list, will be removed."
Japanese officials say South Korea has repeatedly violated the rules governing sensitive exports and the moves are necessary for "national security."
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