South Korean President Park Geun-hye and Japanese Prime Minister Shinzo Abe agreed to boost cooperation in monitoring the situation in the region after North Korea fired three ballistic missiles on Monday.
Pyongyang's latest missile test prompted their meeting in Hangzhou.
Earlier today, North Korea fired three ballistic missiles into the sea off its east coast in a defiant reminder of the risks to global security, as world leaders including US President Barack Obama gathered in China for the second day of the G20 summit.
The medium-range Rodong-class missiles were fired from a region south of the capital Pyongyang just after noon local time (0300 GMT) and flew about 1,000 km (600 miles), hitting Japan's air defence identification zone, South Korea's Office of the Joint Chiefs of Staff said in a statement.
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"We are still analysing details but this is a grave threat to our nation's security, and we express deep concern," the Japan Defence Ministry said in a statement.
The missile test was also an unwanted distraction for the United States, which has been trying on the sidelines of the summit to finalise a deal with Russia for a ceasefire in Syria.
China opposed THAAD anti-missile system in South Korea
Park said a fourth nuclear test by North Korea this year followed by a series of missile tests had badly damaged peace in the region, posing a challenge to the development of Seoul-Beijing ties, South Korean news agency Yonhap reported.
Chinese President Xi Jinping said Beijing opposed the US deployment of the THAAD anti-missile system in South Korea to counter missile and nuclear threats from North Korea.
Two years ago, the North fired two Rodong medium-range missiles just as Park and Abe were sitting down with Obama at the Hague to discuss a response to the North's arms programme.
In 2003, North Korea also tested an anti-ship missile during an Asia-Pacific Economic Cooperation (APEC) summit held in Bangkok.
The G20 summit, bringing together leaders of the world's major economies, had largely focused in its main sessions on spurring the global economy, countering protectionism and removing trade barriers. A communique is to be issued before the meeting wraps up later on Monday.
The missile launches were the latest in a series of launches by the isolated North this year in violation of UN Security Council resolutions - supported by China - that ban all ballistic missile-related activities by the Pyongyang.
Pyongyang rejects the ban as infringing its sovereign right to pursue a space programme and self defence.