Around this time, he became involved in internal politics within the Japanese Army, and joined the Kodaha Faction, led by Sadao Araki, Jinsaburo Mazaki and Toshirō Obata.

[2] However, with the Second Sino-Japanese War, Yanagawa was recalled to active service and assigned command of the IJA 10th Army in China in 1937–1938.

Yanagawa led his troops in pursuit of Chinese forces fleeing from the Shanghai area, and was in command of one of the main Japanese columns at the Battle of Nanking.

[3] Yanagawa retired again from active military service in 1938, becoming secretary general of the East Asia Development Board.

With the support of Baron Hiranuma Kiichirō, and the zaibatsu groups, he took over the Justice Ministry from Akira Kazami in December 1940.