North Korean workers have failed to show up for work Tuesday at the Kaesong joint industrial zone with South Korea, after Pyongyang suspended operations at the last direct economic link between the two nations.
South Korean President Park Geun-hye said that Pyongyang's decision Monday to withdraw more than 50,000 workers from the facility will hurt its credibility in the world as a place to do business.
South Korean companies in the industrial zone contribute an estimated $90 million each year to the North Korean economy. Last week, North Korea blocked South Korean access to the zone.
Meanwhile, Japan has begun deploying ballistic missile interceptors in key locations in and around Tokyo to defend the city in the event of a missile attack by North Korea.
Tensions on the Korean peninsula have worsened in recent weeks as North Korea, angered over a new round of international sanctions, has threatened to attack the South, the United States and U.S. allies in the Asia-Pacific region.
The North Korean military command recently announced it was "authorized" to attack the United States using "smaller, lighter and diversified" nuclear weapons.
There were mixed messages from Seoul Monday about whether the North is preparing for a fourth nuclear test.
Unification Minister Ryoo Kihl-jae told lawmakers there are signs of activity at the North's Punggye-ri nuclear test site. Later, South Korea's Defense Ministry said it has seen no such evidence.
U.N. Secretary-General Ban Ki-moon, a Korean, urged North Korea to refrain from "further provocation." He said a fourth nuclear test would breach U.N. Security Council resolutions.
North Korea will mark the 101st anniversary of the birth of its founding father, Kim Il Sung, April 15 with pomp, ceremony and displays of military strength. Kim Il Sung led the communist country from 1948 until his death in 1994. His grandson, Kim Jong Un, currently holds power.