Obama made the remark at a briefing on the sidelines of Group of Seven talks in Japan where the country's provocations are among the topics on a packed agenda.
"North Korea is a big worry for all of us," Obama said.
"It is not the thing that poses necessarily the most immediate risk. (But) when you have such an unstable regime that is so isolated, that poses the kind of medium-term threat that we have to pay a lot of attention to."
In recent weeks, the North has made repeated proposals for military talks aimed at de-escalating the situation -- but the South has dismissed the offer as an "insincere" propaganda ploy.
The current administration of South Korean President Park Geun-Hye is adamant that substantive inter-Korean talks can only begin once the North makes a tangible commitment to denuclearisation.
Also today, UN Secretary General Ban Ki-moon urged a return to talks with North Korea, during a visit to South Korea that has fuelled speculation of his presidential ambitions in his home country.
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