The Japanese and Manchuria The Japanese, fearful of losing their influence and control of Manchuria, began plotting. On Sept. 18, 1931, a staged explosion in Shenyang (Mukden) in southern Manchuria provided the pretext for the Kwantung Army to move against the large city and occupy it. It came to be known as the Manchurian (or Mukden) Incident. The Japanese army moved then to occupy all of Manchuria, and this was accomplished within a few months because, for some unknown reason, the Nationalist government in Nanking had directed the Manchurian leaders not to resist the Japanese. In 1932 the Japanese created the puppet state of Manchukuo. The Chinese, fearing that Japan would invade n