Japanese automakers saw sales in South Korea slump last month, industry data showed Monday, as President Moon Jae-in thanked his citizens for responding to the intensifying trade dispute with "one heart".
Japan in early July unveiled tough restrictions on exports crucial to tech titans such as Samsung, following a series of South Korean court rulings ordering Japanese firms to pay for forced labour during World War II.
The two neighbours are US allies and face common threats from nuclear-armed North Korea and an increasingly assertive China, but their relationship is strained by bitter rows over Tokyo's 20th-century colonisation of the peninsula.
South Korea and Japan on Friday removed each other from their "white lists" of trusted trading partners, despite US calls for both to calm tensions.
Samsung Electronics, the world's biggest smartphone and memory chip maker, held an emergency meeting Monday to discuss countermeasures to Tokyo's move.
Even before Friday's decision, angry South Koreans had been making their fury known, shunning Japanese brands in favour of local ones, for items such as beer, clothing, cosmetics and even pens.
Data on Monday showed that Koreans turned away from Japanese vehicles last month.
Honda saw its July sales in the South slump 33.5 percent year-on-year, while Toyota Motor's sales tumbled 32 percent, according to data from the Korea Automobile Importers and Distributors Association (KAIDA).
Speaking to his top aides at a cabinet meeting on Monday, Moon called for "extraordinary resolve" to overtake Japan's economy, claiming that working with the North would be one way to do so.
"If a peace economy is realised through economic cooperation between the North and South, we can catch up to Japan's superiority in a single breath," Moon said.
North Korea is deeply impoverished, with a GDP per capita that is just a fraction of the South's, and is subjected to multiple sets of international sanctions over its weapons programmes.
The dovish Moon has been dangling the carrot of inter-Korean business projects to bring it to the negotiating table, but it carried out three weapons tests in the eight days to Friday.