The moderate stance regarding China as well as other foreign policies pursued by the government displeased more extreme militarist and nationalist elements developing in Japan, some of whom disliked capitalism and advocated state socialism. Chief among these groups were the Kwantung army in Manchuria, young army and navy officers, and various organizations such as the Amur River Society, which included many prominent men. Militarist propaganda was aided by the depression of 1929, which ruined Japan's silk trade. In 1931 the Kwantung army precipitated an incident at Shenyang (Mukden) and promptly overran all of Manchuria, which was detached from China and set up as the puppet state of Manchukuo. When the League of Nations criticized Japan's action, Japan withdrew from the organization.
During the 1930s the military party gradually extended its control over the government, brought about an increase in armaments, and reached a working agreement with the zaibatsu. Military extremists instigated the assassination of Prime Minister Inukai in 1932 and an attempted coup in 1936. At the same time Japan was experiencing a great export boom, due largely to currency depreciation. From 1932 to 1937, Japan engaged in gradual economic and political penetration of N China. In July, 1937, after an incident at Beijing, Japanese troops invaded the northern provinces. Chinese resistance led to full-scale though undeclared war. A puppet Chinese government was installed at Nanjing in 1940.
Meanwhile relations with the Soviet Union were tense and worsened after Japan and Germany joined together against the Soviet Union in the Anti-Comintern Pact of 1936. In 1938 and 1939 armed clashes took place on the Manchurian border. Japan then stepped up an armament program, extended state control over industry through the National Mobilization Act (1938), and intensified police repression of dissident elements. In 1940 all political parties were dissolved and were replaced by the state-sponsored Imperial Rule Assistance Association.
After World War II erupted (1939) in Europe, Japan signed a military alliance with Germany and Italy, sent troops to Indochina (1940), and announced the intention of creating a "Greater East Asia Co-Prosperity Sphere" under Japan's leadership. In Apr., 1941, a neutrality treaty with Russia was triumphantly concluded. In Oct., 1941, the militarists achieved complete control in Japan, when Gen. Hideki Tojo succeeded a civilian, Prince Fumimaro Konoye , as prime minister.
Unable to neutralize U.S. opposition to its actions in SE Asia, Japan opened hostilities against the United States and Great Britain on Dec. 7, 1941, by striking at Pearl Harbor, Singapore, and other Pacific possessions. The fortunes of war at first ran in favor of Japan, and by the end of 1942 the spread of Japanese military might over the Pacific to the doors of India and of Alaska was prodigious. Then the tide turned; territory was lost to the Allies island by island; warfare reached Japan itself with intensive bombing; and finally in 1945, following the explosion of atomic bombs by the United States over Hiroshima and Nagasaki, Japan surrendered on Aug. 14, the formal surrender being on the U.S. battleship Missouri in Tokyo Harbor on Sept. 2, 1945.
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