The importance of economic issues, in a comprehensive multilateral and bilateral context, has been receiving increased attention in writings about the Korean Peninsula lately. This article adds to this debate by analysing Japan's relations with North Korea from an economic diplomacy perspective. The concept of 'negative economic diplomacy' is introduced to understand actions of the Japanese government, which had tried economic engagement in various ways until the early 1990s, but hardened its stance thereafter. Tokyo seems to have come to the conclusion that North Korean rulers are more willing to preserve the status quo than some wish to believe and, consequently, started to use the North Korean threat to justify Japan's controversial military enhancement in a context of uncertainty about the United States' commitment and an increasingly stronger China. is strategy was practised through a negative approach to economic diplomacy of withholding economic benefits-in policy fields ranging from the abductees and normalisation of diplomatic relations, to trade relations, sanctions and the six-way process. Japan's policy was most outspoken from late 2002 until at least mid-2007.