A defiant Abe had vowed he would not bow to “terrorism”, as Japan was thrust centre-stage in the conflict gripping Syria and Iraq, where jihadists have seized control of large areas.
“I strongly demand that they not be harmed and that they be immediately released,” he told a news conference in Jerusalem Tuesday.
“The international community will not give in to terrorism and we have to make sure that we work together.”
Abe was due to meet senior ministers just before 0900 GMT, media reported.
The self-styled Islamic State group (IS) has murdered five Western hostages since August last year, but this is the first time it has threatened Japanese captives.
In footage posted on extremist websites, a black-clad militant brandishing a knife addresses the camera in English, standing between two hostages wearing orange jumpsuits.
“You now have 72 hours to pressure your government into making a wise decision by paying the $200 million to save the lives of your citizens,” he says.
The militant says the sum is equal to the aid that Abe pledged in support of the fight against IS.
Japan has repeatedly insisted it has offered non-military assistance for countries affected by the IS group’s bloody expansion in Iraq and Syria, which has spurred an exodus of refugees to neighbouring countries.
Constitutionally pacifist Japan has steered clear of the armed entanglements of the US, Britain and other Western nations in the Middle East.
The ensnarement of two of its citizens in the IS group’s bloody ideological battle is deeply shocking to Japan, and there is likely to be considerable domestic pressure on Abe to try to negotiate their release.
– Video authenticity –
The video of a militant with a British accent brandishing a knife over the heads of journalist Kenji Goto and self-employed military contractor Haruna Yukawa was given blanket coverage Wednesday, with much speculation on the authenticity of the footage.
Film editor Genta Tamaki noted apparent discrepancies in the shadows cast by the hostages, which he said could indicate images of the two men had been inserted into the desert footage.
“In principle, these shadows do not look as one might expect in sunlight,” he was quoted as saying.
This might occur if filming was done indoors using several lights and combined with the background later, he said, although he added it was not possible to be certain.
Outlets also noted clothes worn by Yukawa moved more than those Goto was wearing, and neither man flinched when their captor waved his knife near them.
Chief Cabinet Secretary Yoshihide Suga said experts had examined the footage. He did not address the speculation, but said the Japanese government was assured of the identity of the men.
Hiromasa Nakai, chief spokesman for the Japan Committee for the United Nations Children’s Fund (UNICEF), insisted Goto was a peace-loving man.
He “has been working hard for children in the Islamic world — not only in Syria but also in Afghanistan, Somalia and many other places,” he told AFP.
“It’s an extreme shock to us. We hope he will return safe.”
National broadcaster NHK said it had spoken to someone claiming to be in charge of “public relations” for the militant group.
“We don’t need money,” they quoted the person as saying.
“Islamic State is spending more than ($200m) in one day. It’s not an economic war but a spiritual war,” the person said, repeatedly adding the group was confident “your government will pay the money”.
The release of a video on the day Abe was in Jerusalem and due to give a major press conference is a grim reminder of the well-oiled PR machine of the IS group.
It follows a pattern established last year with the killings of US journalists James Foley and Steven Sotloff, American aid worker Peter Kassig and British aid workers Alan Henning and David Haines. All of them were beheaded.
The man who appeared in the video threatening the Japanese hostages spoke with a very similar southern English accent to the militant who appeared in the footage posted of the executions of the Britons and Americans.
Memories in Japan are still fresh of the 2013 Algerian gas plant crisis, in which 10 Japanese lost their lives at the hands of militants.
The last Japanese citizen believed to have been beheaded by Islamist militants was tourist Shosei Koda, 24, who was killed in Iraq in 2004 after Tokyo ignored demands to pull out troops engaged in reconstruction work. (AFP)