"The ruling indicates that the treaty is valid, but it does not terminate an individual's right to claim damages against Japanese firms (over forced labor)," he added.

In late October, the top court ordered Nippon Steel & Sumitomo Metal Corp. to compensate four South Koreans for wartime forced labor and unpaid work. One month later, the court handed down similar rulings against Mitsubishi Heavy Industries Ltd. to pay compensation to ten former forced laborers.

Japan reacted angrily to the decisions, claiming that all reparation issues linked to its 1910-45 colonial rule were settled in the 1965 state-to-state pact on normalizing diplomatic relations.

"They were the judicial branch's rulings. Like Japan, as South Korea guarantees the separation of legal, administrative, and judicial powers, the government needs to respect the court decisions," Moon was quoted as saying by deputy presidential spokesperson Ko Min-jung.

The president also called for prudence in handling the issue in a way that does not hurt the sentiment of people of both nations.

"Hurting the sentiments of people in both countries does not help the future development of Seoul-Tokyo ties," Moon stressed.

Meanwhile, Moon proposed that Seoul and Japan find ways to utilize the 1 billion yen ($9 million) of Japanese funding for a foundation to support Korean victims of Japan's wartime sex slavery now that the South has decided to dissolve the body.

In late November, the government said that it will shut down the foundation in an move to effectively nullify a controversial accord signed in 2015 by the government of Moon's predecessor, President Park Geun-hye.

Moon viewed the deal as "seriously flawed" and decided not to use the fund.

"Since my inauguration, I've emphasized that there is a need to separate the resolution of wartime history-related issues and the development of Seoul-Tokyo ties in a future-oriented way," he said.

"Political leaders from both countries need to encourage and spur friendship toward each other."

The Japanese delegation was visiting Seoul to attend a general meeting of a group of South Korean and Japanese lawmakers seeking to promote bilateral ties. (Yonhap)