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The paper examines the Japanese position on East Timor and highlights tension in bilateral relations between Australia and Japan on East Timor during the year 1999. The sources of tension were over leadership, appropriate policy towards indonesia and the style of diplomacy conducted by Australia. In many respects the tension over East Timor shook complacency in bilateral relations. By January 2001 tension was resolved and bilateral ties have been strengthened in the areas of security and regional cooperation. What does this episode reveal about the bilateral relationship? Quite clearly, and despite the depth of networks that have been established over the decades, there was insufficient consultation on East Timor. In pan, the extraordinary events that unfolded after the results of the ballot in East Timor were announced on 4 September 1999 and Australia's leadership role in the international Force in East Timor (INTERFET) can explain the lack of consultation. Also, a drift in relations that had been evident for several years was a significant factor. Finally, the paper argues that despite the substantial improvement in bilateral relations, policy towards Indonesia will remain a potential source of friction between the two countries. [ABSTRACT FROM AUTHOR]