Japanese interest in what it called the "South Seas" (南洋, Nan’yō) began in the 19th century, prior to its imperial expansion into Korea and China.

[5] By 1875, ships from the newly established Imperial Japanese Navy (IJN) began to hold training missions in the area.

[6] Three years later, Shiga advocated for annexation of the area by claiming that doing so would "excite an expeditionary spirit in the demoralized Japanese race.

"[7] Despite the appeal imperialism had for the Japanese public at the time, neither the Meiji government nor the Navy seized any pretexts to fulfill this popular aspiration.

[8] Although the Japanese public's enthusiasm for southward expansion had abated by the turn of the century, a number of important intellectuals, businessmen, and military officials continued to advocate for it.

The latter declared that the future of Japan "lies not in the north, but in the south, not on the continent, but on the ocean" and that its "great task" was to "turn the Pacific into a Japanese lake.

The Anglo-Japanese Alliance of 1902 had been signed primarily to serve Britain's and Japan's common interest of opposing Russian expansion.

[13][10] Japan participated in a joint operation with British forces in autumn 1914 in the Siege of Tsingtao (Qingdao) to capture the Kiautschou Bay Leased Territory in China's Shandong Province.

The Japanese Navy was tasked with pursuing and destroying the German East Asia Squadron[14] and protection of the shipping lanes for Allied commerce in the Pacific and Indian Oceans.

[15] During the course of this operation, the Japanese Navy seized the German possessions in the Marianas, Carolines, Marshall Islands and Palau groups by October 1914.

Meanwhile, Japanese occupation of the northern part of the protectorate, consisting of the Micronesian islands north of the equator, was formally recognized by the treaty.

[20] Militarily and economically, Saipan, in the Marianas archipelago, was the most important island in the South Seas Mandate[21] and became the center of subsequent Japanese settlement.

By 1920 all authority had been transferred from the Naval Defense Force to the Civil Affairs Bureau which was directly responsible to the Navy Ministry.

[citation needed] The population of the South Seas Mandate was too small to provide significant markets and the indigenous people had very limited financial resources for the purchase of imported goods.

[25] Nevertheless, the territory provided important coaling stations for steam-powered vessels[26] and its possession gave an impetus to the Nanshin-ron doctrine of "southward advance".

Agricultural workers were followed by shopkeepers, restaurant, geisha house and brothel-keepers, expanding former German settlements into Japanese boom towns.

[31] In the census of December 1939, the total population was 129,104, of which 77,257 were Japanese (including ethnic Chinese and Koreans), 51,723 indigenous islanders and 124 foreigners.

[32] The government of the Mandate built and maintained hospitals[33] and schools,[34] and free education was provided for Micronesian children aged 8–15.

[25] The Japanese entrepreneur Haruji Matsue arrived on Saipan in 1920 and formed the South Seas Development Company, which became the largest commercial enterprise in Micronesia.

[43] Bananas, pineapples, taro, coconuts,[14] manioc, coffee[41] and other tropical farming products were also grown, putting the islands on a par with Taiwan.

[citation needed] The South Seas Trading Company had an exclusive contract from 1915 with the IJN to provide freight, passenger, and mail services to the Empire as well as between the islands.

[14] The flying boat was the principal type of aircraft used for commercial aviation due to the shortage of flat land available for airfields.

Commercial services ceased shortly after the start of Pacific War, but the widespread network of seaplane bases continued to be used during wartime.