A sharp dispute between the Soviet Union and Japan over fishing rights was settled by agreement for one year, Japan to participate on Soviet terms in an auction of the fishing areas.
Serious fighting between Soviet forces and the Japanese Guandong Army at Nomonhan broke out on the Manchurian–Outer Mongolian border. Over the course of the summer, Japan lost 18,000 troops. A peace was reached in mid-September.
The Nazi-Soviet Nonaggression Pact was concluded, proving to be a tremendous shock to Japan, which at once scrapped the anti-Comintern pact and resumed freedom of action.
(1867–1952), who formed a cabinet that included Konoe.
