Japanese Prime Minister Shinzo Abe said a number of unilateral sanctions would be revoked after progress in talks with the North over its Cold War kidnapping of Japanese nationals.
In a statement, the South Korean foreign ministry said it recognised the "humanitarian" nature of Japan's concern over the kidnapping issue.
But it also stressed that any discussions between Japan and North Korea on pending issues, including the lifting of sanctions, had to be done in a "transparent" fashion.
The United States and its two main military allies in Asia have generally kept up a united front on the North Korean nuclear issue.
But a deepening rift between Seoul and Tokyo -- related to disputes dating back to World War II and Japan's colonial rule over the Korean peninsula -- has made the alliance look increasingly fragile.
South Korean officials say Pyongyang is using the kidnapping issue to exploit that fragility and push Tokyo towards a more independent North Korea strategy.