http://www.microworks.net/pacific/ro...oute_south.htm
Japan was caught virtually flat-footed bu operation Barbarossa. It was not that it had no advance warning - Japan's ambasssador Oshima Hiroshi had caught notice of the plan earlier in the month and reported it to Tokyo on the 5th of June. But it had received that warning too late still: for no more than two months earlier, it had concluded a neutrality pact with the Soviets.
The man responsible for bringing about that pact was Japan's Foreign Minister, Matsuoka Yosuke.
In personal talks with the Soviets, Matsuoka had followed the example of Germany in befriending the Soviets (or so he thought). Obvious benefits would result from this: improved relations with the Soviets would increase the chance of persuading Stalin to cease aiding China's Nationalist regime, and allow some reorientation away from the Soviet threat, as well as sending a signal to the Americans that Japan was not at all isolated.
on June 23rd, a shattered Matsuoka, who had ignored German hints at their upcoming offensive when he had visited Berlin in April, ruefully admitted to the Cabinet that he had misjudged. He went on to propose that Japan now join the Germans in their attack on the Soviets, a proposal so incredible when coming from the very architect of the neutrality pact that a cabinet member asked it to be repeated. That same day, the Imperial Navy affirmed its wish to strike south and occupy Southern Indochina.
For a week thereafter, at two liaison conferences of the Army, Navy and Foreign Ministries, and the Prime Minister, the Japanese leadership debated the relative options. In the end, however, no decision was come to. An Imperial Conference on July 2nd was summoned to deal with the outstanding decisions. The result of the conference was a decision to leave the Soviets alone for the time being (presumably awaiting more favorable conditions), and concentrate on the South. The resolution called for the occupation of Southern Indochina, for the establishment of the "Greater East-Asia Co-Prosperity Sphere". Alas, it left open just about any route, by conditioning the future course of the Japanese expansion on the development of the situation. In recognition of that, it called for the secret mobilization of one million reservists and conscripts, for use either against the Soviets or in the southern expansion.