Fans at the East Asian Cup game at Jamsil Stadium unfurled a massive banner that read: 'A nation that forgets its history has no future" in an apparent reference to what many South Koreans see as Japan's unwillingness to acknowledge its wartime and colonial excesses.
The two countries were also at the centre of a diplomatic row at the 2012 London Olympics when footballer Park Jong-woo held up a sign referring to a territorial dispute while celebrating South Korea's 2-0 win over Japan in the bronze medal game in August.
"I was hoping something like this would not occur this time, so it's unfortunate," Japan's Kyodo News quoted JFA President Kuniya Daini as saying on Monday.
"We ask the East Asian federation to thoroughly investigate the matter and act in the appropriate fashion."
Japanese Chief Cabinet Secretary Yoshihide Suga said the incident was "extremely regrettable" and the Japanese government "will respond appropriately based on FIFA rules when the facts are revealed."
The Korean Football Association (KFA) said: "We are still investigating the matter. We have no official statement now".
Local media reported that staff at the stadium tried to prevent South Korea's hardcore fans group, the Red Devils, from unfurling the banner, which stretched across several sections of the upper deck behind one of the goals.
The banner was then removed by stadium officials, which prompted a second-half 'cheering boycott' by the Red Devils, who remained silent for the rest of the game.
Earlier this year, the IOC issued a warning to Korea's Olympic Committee over the incident in London.
The player, who was handed a sign that read "Dokdo is our territory" by a fan, was forced to skip the medal ceremony and was later banned by soccer's governing body FIFA for two games and fined 3,500 Swiss francs (£2450).
Many South Koreans harbour bitter memories about Japan's 1910-1945 colonial rule, though Tokyo says it has settled all its obligations and has apologised.
In response to the protest, South Korean opposition party representative An Min-suk launched a broadside at the KFA for allowing Japanese fans to display the 'Rising Sun' flag, which South Koreans associate with Japan's militaristic past.
"It is outrageous that they (KFA) let them hoist the flag and only cracked down on the banners prepared by the Red Devils," An told Reuters by telephone.
"The flag symbolizes all the heinous war crimes committed by the Japanese during the colonial times when they were trampling us. The Korea Football Association is walking on eggshells and trying to curry favour with its Japanese counterpart while doing a poor job in protecting the interest of our people."
Japan won the game 2-1 to clinch the tournament, which also featured Australia and China.