Introduction There exists strong evidence that reveals deterioration of trade relations between Australia and Japan. The former has focused on new trading partners such as China, whose economic growth in the recent years has been tremendous. The relationship between Australia and Japan has been two-way commercial for over five decades 1 . Notwithstanding this relationship, the public opinion in Australia has sometimes been against the Japanese because of the atrocities they committed during the Second World War. The public opinion can explain the recent trend whereby Australia has shifted attention towards China as a trading partner. In the recent years, Australia has increased purchases of manufactured goods from the most populous nation. Analogously, Australia has been importing raw materials in larger volumes. This essay will discuss the state of trade relations between Japan and Australia and the emergence of China as Australia’s major trading partner. Discussion For more than the past five decades, Australia and Japan have enjoyed regional and bilateral benefits stemming from their commercial interconnections that yielded developments and accumulation of wealth to the two countries. The two nations have been sharing joint interests and cooperation. Building this remarkable partnership dates back to sixty years after the end of World War II with Australia supplying Japan with natural resources and energy exports. Despite the strong economic relationship between Japan and Australia with both economies geared towards a common security framework, shared interest, and bilateral cooperation in pursuit of common multilateral goals, the relationship between the two economies has been constrained by a number of factors. One of the major concerns is the need for a genuine cultural relationship. China has been working so hard to seal this gap, but still Japan outshined it by a significant edge 2 . The partnership between Japan and Australia was in several ways a natural one, built on their openness to investment and trade. Today, Japan and Australia interact with a bigger number of interlinked global powers with different levels of development, political ideologies as well as interstate policies. These influential trends have affected an extensive global debate revolving around appropriate reactions to climatic changes, trade negotiations, and on the controversial issue of humanitarian crisis. Japan and Australia are predominantly susceptible to such global trends, as primary countries in the Asia Pacific region where new principal powers and power diffusion are predominant. With China among the rising countries, power balance in the region is gradually changing largely 3 . The Japanese Threat Traditionally, communal financially viable needs have fostered emergence of physically powerful trade links, with Japanese investments being a central source of economic escalation and capital expansion in Australia 4 . However, questions posed about the aptitude of the Japan-Australia cooperation, and the biased and bureaucratic mechanisms that surround it to deal with the entrenched antagonism towards Australia’s contact with her long time trade partner Japan date back from as early as 1986 when early cipher of anti-Japanese cropped up. The international Trade a