South Korea has removed Japan from its list of most trusted trading partners, the latest sign of unraveling ties between two U.S. allies mired in a series of disputes.

The change means that exports of some strategic goods to Japan will receive greater scrutiny than shipments to 28 other fast-track destinations, South Korea's trade ministry said early Wednesday in a statement.

Japan on Wednesday urged South Korea to clearly explain why it revoked Tokyo's preferred trading partner status, calling the move "extremely regrettable."