DHAKA: Japan’s prime minister has condemned as ‘outrageous and unacceptable’ a video declaring the murder of Japanese hostage Haruna Yukawa by Islamic State.

Shinzo Abe demanded the release of a second hostage, purported to be Kenji Goto, shown in the video. Japan says it is trying to verify the footage.

On Tuesday, Islamic State (IS) said it would kill the two men unless Japan paid $200m within 72 hours.

But IS now appears to be demanding an exchange of captives instead.

Goto appears to say IS would swap him for Sajida al-Rishawi - an Iraqi militant held in Jordan.

After the latest tape, Abe said Japan would not bow to terrorism.

‘This act of terrorism is an outrageous and unacceptable act of violence,’ he said, reports the BBC.

‘I again strongly demand the immediate release of Mr Kenji Goto unharmed.’

In a statement, president Barack Obama said the US ‘strongly condemns the brutal murder of Japanese citizen Haruna Yukawa by the terrorist group ISIL [or IS]’.

Obama said the US would stand ‘shoulder to shoulder’' with Japan.

BDST: 1041 HRS, JAN 25, 2015