Tokyo: Islamic State militants said they had beheaded a second Japanese hostage, journalist Kenji Goto, prompting Prime Minister Shinzo Abe to vow to step up humanitarian aid to the group's opponents in the Middle East and help bring his killers to justice.

"I feel intense indignation at this utterly cruel and despicable act of terrorism," a grim-faced Abe told an emergency Cabinet meeting early on Sunday, shortly after a video surfaced purporting to show the beheading of Goto, after the failure of international efforts to secure his release through a prisoner swap.

The hardline Islamist group, which controls large parts of Syria and Iraq, released the video showing a hooded man standing over Goto with a knife to his throat, followed by footage of a head put on the back of a human body. Japanese Defence Minister Gen Nakatani said the video appeared to be genuine.

The video was released exactly a week after footage appearing to show the beheaded body of another Japanese hostage, Haruna Yukawa.

"I will never forgive these terrorists," Abe said. "Japan will work with the international community to bring those responsible for this crime to justice. Japan will never give in to terrorism."

Abe is defiant against IS

When Islamic State first threatened Goto, 47, and Yukawa, 42, two weeks ago, it justified its move by citing Abe's pledge of $200 million in aid to countries battling the militant group.

But in a show of defiance, Abe on Sunday vowed to increase Japan's food, medicine and other humanitarian aid for the Middle East.

Islamic State had said Goto was held along with a Jordanian pilot. Efforts to win their release had focused on the possible release in exchange of an Iraqi would-be suicide bomber jailed in Jordan 10 years ago. The video did not mention the pilot.

President Barack Obama said the United States condemned the ‘heinous murder’ and would continue to work with allies to destroy the hardline Islamist group.

Britain and France also condemned the killing.

Addressing Abe, the militant in the video said: "Because of your reckless decision to take part in an unwinnable war, this knife will not only slaughter Kenji, but will also carry on and cause carnage wherever your people are found. So let the nightmare for Japan begin."