The present paper investigates the latest developments in the Japan-South Korea economic and political relationship, reviewing the recent (2019) far-reaching consequences of the conflict over the compensation for forced labour. The paper argues that the issue of wartime forced labour has been intensely politicized by both governments, and their inability to find consensus on this particular historical issue has severely corroded economic and diplomatic ties. Ultimately, the analysis of bilateral relations shows that both governments have been acquiring political capital from positioning themselves one against the other.