Speaking to a group of former diplomats, Kim said better ties with Japan would have to be developed cautiously, the Yonhap news agency reported.
"I would like to emphasize that we should develop a future-oriented relationship with Japan while protecting our territorial sovereignty and calling for Japan to look squarely at its history," Kim told the meeting organized by the Korean Council on Foreign Relations.
Kim, who was to meet later in the day with an envoy from newly elected Japanese Prime Minster Shinzo Abe, said he expected the relationship with Japan "will pose a big challenge for Korea this year."
In the meeting with the envoy, Fukushiro Nukaga, Kim expressed a desire to "further strengthen bilateral relations" with Japan.
Nukaga said he hoped for a 'good start" with the new Seoul government.
However, Nukaga expressed "regret" that a South Korean court Thursday turned down Japan's request that a Chinese man be extradited to face charges he attempted to set fire to a war memorial in Tokyo.