Meanwhile, US Secretary of State Rex Tillerson yesterday described the unlawful Communist state as an "ever escalating threat".
China has been stepping up its retaliation against South Korea, mostly in the business sector, as Seoul and Washington are going ahead with their plan to install a THAAD battery on the peninsula to better counter threats from the North.
"North Korea and its people need not fear the United States or its neighbours", he said, suggesting that criticism was aimed at the regime in Pyongyang.
"With a policy review on North Korea under way in Washington, (Tillerson's visit) will give us a good opportunity to share our diverse experiences on the North that we have accumulated for decades and provide our input", he said on condition of anonymity.
"If they elevate the threat of their weapons programme to a level that we believe that requires action, that option is on the table", Tillerson added.
"Is this really the message they want to send to the public, as well as other nations?"
Toner insisted the accredited press is not being ostracized and that the 20 or so reporters who traveled to Asia on their own to follow Tillerson would have access to him.
Tillerson was speaking in Tokyo on Thursday while on a tour of Asia to speak with neighbours of the highly secretive state, in order to discuss a new method of dealing with the country.
The pace of the North's missile development has intensified and its projectiles have since past year been landing ever loser to Japan's coast.
Trump administration trade adviser Peter Navarro cited Japan on Monday for non-tariff trade barriers and said Washington must use its leverage as the world's largest market to boost USA exports.
Past US administrations have considered military force because of North Korea's development of nuclear weapons, but the option has rarely been expressed so explicitly.
"North Korea would strike a compromise only if it is convinced that America may actually resort to a military option", Watanabe said.
Tokyo is also considering beefing up its ballistic missile defences with a U.S. Terminal High Altitude Area Defense (THAAD) anti-missile system or Aegis Ashore, a land-based version of the missile defence system used at sea.
To manage these, cooperation with related parties such as Japan, South Korea, China and Russian Federation would be necessary in dealing with North Korea, Watanabe said.
He later met separately with Japanese Prime Minister Shinzo Abe.
The U.S.is now involved in annual military drills in South Korea that North Korea regards as a rehearsal for invasion.
After Tokyo, Tillerson visits South Korea, caught up in political upheaval after last week's ouster of its president, Park Geun-hye, over a corruption scandal.
Japan has been on edge over North Korean launches since a mid-range ballistic missile flew without warning over the northern part of the country and into the western Pacific in 1998. Tillerson, however, stressed that cooperation with Japan and South Korea was "critical".