Japan is easing some sanctions on North Korea in return for its reopening of a probe into the fate of Japanese citizens abducted decades ago, as a fresh report emerged that some of them were alive.
Japan will lift travel curbs to and from North Korea and end restrictions on the amount of money that can be sent or brought to the country without notifying Japanese authorities.
It will also allow port calls by North Korean ships for humanitarian purposes.
"This is just a start," Japanese Prime Minister Shinzo Abe, who has made the fate of the abductees a focus of his political career, told reporters.
"We will make every effort to achieve a complete resolution of this issue."
Easing the sanctions will likely have only a minimal economic impact, but it could be a first step towards repairing long-chilled ties between Tokyo and Pyongyang.
The decision comes at a time of persistent international concern about the volatile North's nuclear and missile programmes.
Mr Abe said the government had determined that North Korea took an unprecedented step in establishing a new entity to investigate all Japanese nationals involved.
Chief Cabinet Secretary Yoshihide Suga, however, told reporters separately that Abe was not considering a visit to Pyongyang in the autumn, as some media have speculated.
The Nikkei business daily said that North Korea had handed Japan the names of at least ten of its nationals said to be living in that country, including some of those believed to have been abducted.
Proof that some of the missing Japanese are alive would almost certainly boost Mr Abe's popularity. Mr Suga however said the government had not received any report of such a list.
Japan has stressed that its decision does not mean it is out of step with the United States and South Korea on dealing with Pyongyang.
But Seoul - while expressing hope for an early resolution to the abductions issue - urged Japan to make sure that its steps were in line with international moves.
"This government wants to stress that ... any action taken by the Japanese government related to this must be within the bounds that do not compromise the framework of international cooperation on the North Korean nuclear and missile issues such as between South Korea, the United States and Japan," the South Korean foreign ministry said.
Some analysts said cracks were starting to show.
"It seems to me that it's going to become harder and harder for the US to pretend that everything is fine in terms of coordination on DPRK (North Korea) policy as Japan moves down this road," Joel Wit, a former US State Department official and visiting fellow at the US-Korea Institute at Johns Hopkins School of Advanced International Studies in Washington, told Reuters in an e-mail.
North Korea agreed in May to reopen the probe into the status of Japanese abductees, who were taken in the 1970s and 1980s to help train spies.
In return, Japan promised to lift some of its sanctions when the investigation was launched.
Pyongyang, however, has a history of reneging on deals.
It admitted in 2002 to kidnapping 13 Japanese citizens, and five abductees and their families later returned to Japan.
North Korea said the remaining eight were dead and that the issue was closed, but Japan pressed for more information about their fate and others that Tokyo believes were also kidnapped.
In 2008, Pyongyang promised to reopen the probe of Japanese abductees but it never followed through. It also reneged on promises made in multilateral talks aimed at ending its nuclear weapons programme and declared the negotiations had ended.
Some critics have said that North Korea already knows the fate of the missing Japanese and that the promised reinvestigation was largely a diplomatic ploy.