WASHINGTON (Reuters) - The United States, Japan and South Korea have been working to cut off North Korean revenue streams from coal and overseas workers and are considering further joint action after Pyongyang's latest nuclear test, a senior U.S. official said on Tuesday.

Daniel Russel, the U.S. assistant secretary of state for East Asia, said the three countries had been making progress in key areas, including disrupting North Korea's arms trade and de-flagging North Korean ships.

"We're focusing our efforts on cutting off sources of revenue for the regime's unlawful nuclear and ballistic weapons programs, including revenue generated through the coal trade and overseas by North Korean workers," Russel said in prepared testimony for a congressional hearing.

"Our three countries will continue to increase the costs on North Korea and target its revenue and reputation until it makes a strategic decision to return to serious talks on denuclearization and complies with its international obligations and commitments," he said

Discussions are also under way on a possible new U.N. sanctions resolution on North Korea after it carried out its latest and largest nuclear test on Sept. 9.

Russel said on Friday he was confident an agreement would be reached before long that would impose further sanctions and tighten existing ones.

He said it would aim to prevent North Korea's abuse of international infrastructure, including banking and shipping.

On Monday, the United States said it had sanctioned a Chinese industrial machinery and equipment wholesaler for using front companies to evade sanctions on North Korea's nuclear weapons and ballistic missile programs.

China, North Korea's main ally and neighbor, has been angered by North Korea's nuclear tests and has said it will work within the United Nations to formulate a necessary response.

However, China said on Tuesday it was opposed to any country using its own laws to carry out "long-arm jurisdiction."

North Korea's former Cold War allies have responded to Pyongyang's nuclear and missile tests by kicking out North Korean workers and ending visa-free travel for its citizens, as well as by stripping flags of convenience from its ships.

A U.N. Security Council resolution adopted in March following North Korea's fourth nuclear test in January exempted North Korean exports of coal and some other minerals for "livelihood purposes" from a trade ban, which was seen as a loophole that would be difficult monitor.

(Reporting by David Brunnstrom; Editing by Paul Simao)