Japan is faced with a serious strategic dilemma presented by the intensifying US-China strategic competition. On the one hand, it supports the maintenance of the status quo defined by the US hegemony and its related liberal internationalist features. Not only has the US-led order brought peace, stability and prosperity to Japan, it also served as a deterrent to the emergence of a Chinese-led order in East Asia. On the other hand, Japan is also concerned about the relative weakening of the US influence and power in the Indo-Pacific vis-à-vis China’s emergence as a peer competitor status to the US. This would mean a weakened US guarantee of Japan’s national security and greater likelihood of the emergence of a Chinese-led order in East Asia. This paper poses two questions: how is Japan responding to this dilemma caused by the intensifying US-China competition? And what type of foreign policy is Japan pursuing?