WASHINGTON (AFP, Reuters) - US President Donald Trump called for tougher sanctions on North Korea after it fired a ballistic missile Sunday (May 14) in an apparent bid to test the South's new liberal president and the US, while Beijing called for restraint.

"Let this latest provocation serve as a call for all nations to implement far stronger sanctions against North Korea," the White House said in a brief statement.

The missile flew more than 700km before landing in the Sea of Japan (East Sea) surrounded by the Korean peninsula, Japan and the Russian far east.

It impacted "so close to Russian soil ... the president cannot imagine that Russia is pleased," the White House said. North Korea "has been a flagrant menace for far too long," it said.

The US Treasury Department said it is looking at "every tool in its arsenal" to cut off sources of international financing for illegal activities in North Korea.

"We don't comment on future sanctions, but we are obviously going to consider every tool in our arsenal to combat any illicit activity and terror financing," a senior Treasury Department official said.

"We are entertaining all the tools in our arsenal," said the official, which include programs originating from the offices of Terrorism and Financial Intelligence and Foreign Assets Control.

Multiple sets of UN and US sanctions against North Korea have done little to deter Pyongyang from pursuing its nuclear and missile ambitions. Trump has threatened military action against the North but recently appeared to have softened his stance, saying he would be "honoured" to meet leader Kim Jong Un under the right conditions.

Washington has been looking to China for help in reining in Kim and the missile test is likely to embarrass Beijing, which is hosting a summit Sunday to promote its ambitious global trade infrastructure project.

China, the isolated North's sole major ally and economic lifeline, has been reluctant to exert pressure to upset the status quo in Pyongyang and risk an influx of refugees from its neighbour.

"Relevant Security Council resolutions have clear rules about North Korea using ballistic missile technology to carry out launches. China opposes relevant launch activities by North Korea that are contrary to Security Council resolutions," China's foreign ministry said in a statement sent to Reuters.

"At present the situation on the peninsula is complex and sensitive, and all relevant parties should exercise restraint and do nothing to further worsen regional tensions."

'Seeking leverage'

New South Korean President Moon Jae In, who was inaugurated on Wednesday, slammed the missile test as a "reckless provocation" after holding an emergency meeting with national security advisers.

He said the government strongly condemned this "grave challenge to the peace and security of the Korean peninsula and the international community," his spokesman Yoon Young Chan said.

Moon, unlike his conservative predecessors, advocates reconciliation with Pyongyang but warned Sunday that dialogue would be possible "only if the North changes its attitude". Moon had said in his inauguration speech that he was willing to visit Pyongyang "in the right circumstances" to defuse tensions on the Korean peninsula.

"The North is apparently trying to test Moon and see how his North Korea policy as well as policy coordination between the South and the US will take shape," said Yang Moo Jin, professor at the University of North Korea Studies in Seoul.

The launch was also aimed at "maximising the North's political leverage" ahead of possible negotiations with the US, as Pyongyang and Washington both recently signalled they were open to talks, he added.

"The North wants to show before negotiations that their precious, powerful weapon is not something they would give up so easily," Yang said.

Moon and Washington have signalled an interest in negotiations to ease months of tensions. Choe Son Hui, a senior official at the North's foreign ministry handling its US policy, also said Saturday the North would be willing to hold talks with the US if the conditions are right.

'Fast progress'

The latest test was also the North's first launch since a controversial US missile defence system deployed in the South became operational on May 2 and follows a failed April 29 ballistic missile test.

Japanese Prime Minister Shinzo Abe slammed the latest missile launch as "totally unacceptable" and a "grave threat" to Tokyo. "We strongly protest against North Korea," he said. One recent missile launch staged in March saw three North Korean missiles falling provocatively close to Japan, sparking alarm in Tokyo.

Russian President Vladimir Putin is concerned about the test by North Korea, a Kremlin spokesman said on the sidelines of a visit by Putin to Beijing.

The North has staged two atomic tests and dozens of missile launches since the start of last year in its quest to develop a missile capable of delivering a nuclear warhead to the US mainland.

Most experts have doubted that the North has developed an intercontinental ballistic missile (ICBM) with that range. But many say the isolated nation has made a great progress in its nuclear and missile capabilities since Kim took power after the death of his father and longtime ruler, Kim Jong Il, in 2011.

The US Pacific Command said Sunday's launch did not appear to be an ICBM. Yang said however it showed "fast progress" in Pyongyang's missile capability.

The missile was fired from a site near the north-western city of Kusong. A previous test at the same site in February sent a missile 500km, far less than Sunday's launch.