It comes two days after Japan's Prime Minister Shinzo Abe pledged $200million in non-military support for countries fighting ISIS in Iraq and Syria.
The video, identified as being made by the group's al-Furqan media arm and posted on militant websites associated with the extremist group, mirrored other hostage threats it has made.
The clip, posted on militant websites associated with the extremist group, featured the British-accented militant widely known as 'Jihadi John' who appeared in the beheading videos of four Western hostages last year.
It shows the two Japanese captives in orange jumpsuits that the militants identify as journalist Kenji Goto Jogo and military company operator Haruna Yukawa.
Japanese Prime Minister Shinzo Abe demanded that the two men be released unharmed.
'I am extremely indignant at such an act,' he told a news conference during a visit to Jerusalem.
He insisted the aid would be disbursed as promised.
'This posture will not change at all,' he said, stressing that the money was to help the displaced and those made homeless by the conflict in Iraq and Syria.
Asked whether Japan would pay ransom to secure their release, he replied: 'With regard to this case, we attach the utmost priority to saving lives and gathering information with the help of other countries.
'We'll make utmost efforts to save the lives (of the captives) from now on.'
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