Japan's restrictions of exports to South Korea of materials vital for semiconductor and display production took effect last Thursday, in apparent retaliation for Seoul court rulings that ordered Japanese firms to compensate Korean victims of wartime forced labor.

"One of the reasons (South Korean firms) are so seriously affected is (their) excessive reliance on Japanese components and materials," the prime minister said, adding that South Korea needs to diversify its import sources and improve self reliance.

Asked whether the government has sought mediation by the United States, Lee said, "The government is making all kinds of diplomatic efforts imaginable."

The government is also bracing for additional measures the Japanese government could take, he said. (Yonhap)