The test also coincides with intelligence reports that North Korea would test a nuclear device.
Moon, a liberal who took office in May after a decade of conservative rule in South Korea, supports engagement with North Korea, but was quoted after the launch as saying that "dialogue is only possible when we have a strong military, and engagement policies are only possible when we have the security capability to dominate North Korea".
Engine tests have been a particular concern for observers of North Korea, as the engine previously employed in missiles, the Musudan, had a bad track record and several recorded failures.
The military said the missile, a Hyunmoo-2 with a range of up to 800 kilometers (nearly 500 miles), hit its target accurately.
Experts however say North Korea could still be years away from possessing any reliable ICBM capability, reports said.
North Korea has reportedly carried out another test of a space rocket engine, which could be used for an intercontinental ballistic missile (ICBM) that could potentially be capable of reaching the USA mainland, American officials have told media outlets.
Despite global condemnation, North Korea has increased its missile tests, with the aim of developing an intercontinental nuclear-armed rocket.
President Trump tweets 'We will BUILD THE WALL!'
Trump had recently said that the proposed wall along the border with Mexico could have solar panels fixed to it. Managing partner Thomas Gleason said the design for each piece of solar wall is 20-feet-long and 9-feet-high.
Chinese Foreign Ministry spokesman Geng Shuang said China opposed any action that violated UN Security Council resolutions and called for restraint from all parties.
South Korean President Moon Jae-in watches a test-firing of an indigenously developed ballistic missile at the state-run Agency for Defense Development in Taean, South Korea.
"We've said many times that China is making unremitting efforts to resolve the Korean peninsula nuclear issue, and plays an active and constructive role", he said.
In 2012, the North Korean regime spent a whopping $645.8 million on luxury goods, according to a 2014 United Nations report.
Despite worldwide sanctions so tough they prompted Kim to warn his citizens to prepare for possible starvation and severe economic hardship, it wasn't the "dear leader" or North Korean officials you saw tightening their belts.
On June 13, Warmbier was returned to the United States from North Korea in a coma after being held in that country for more than a year. The previous intercept test, conducted in February, had been successful.
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