A visibly upset Japanese Prime Minister Shinzo Abe has vowed to "never forgive terrorists" after the Islamic State (ISIS) released a video purportedly showing the beheading of Japanese hostage Kenji Goto.

"I am extremely angry about these heinous and despicable terrorist acts. We will never forgive terrorists," Abe told reporters in Tokyo on Sunday morning (local time), according to the AFP news agency.

"We will cooperate with the international community to make them atone for their crimes," he declared.

The ISIS claim was made in a video released online that included no mention of a Jordanian pilot also being held by the group and whom they have also threatened to kill.

In the video, Goto, a journalist, is seen kneeling next to a standing masked man who speaks with a British accent and blames the Japanese government for his "slaughter".

"I am at a loss for words thinking about the pain that (Goto's) family must feel," Abe said.

On Saturday, Japanese media quoted Deputy Foreign Minister Yasuhide Nakayama as saying that negotiations with the group were "deadlocked".

"The government has been working with the utmost efforts on the issue -- I'm deeply regret that this is the result," Abe said.

"Japan will never yield to terrorism...(and) is firmly resolved to fulfill its responsibility in the international community's fight against terrorism,” he continued.

"I will take thorough measures to ensure the safety of Japanese citizens inside and outside Japan."

The premier was holding an emergency meeting after the brief press conference.

ISIS had demanded that Jordan release an Iraqi female jihadist in exchange for the Japanese and Jordanian hostages, but Jordan on Thursday demanded proof that the pilot is still alive before releasing the female jihadist.