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This article addresses a profoundly curious question of why Korea and Japan conflict with each other despite deepening ties and growing transactions. In contrast to the existing explanations, this article makes three analytical innovations. First, for inducing cooperation between Korea and Japan, what matters is convergence/divergence of external threat perception, not the magnitude of threat. Second, history is not a constant but a variable. Historical contentions can be escalated or deescalated depending on political situations. Third, the role of the US in managing Korea-Japan relations is important but not determinant. The style of US engagement in East Asia serves as an intervening variable for conflict management. This article suggests that frictions are highest when historical contentions are escalated and external threat perception diverges. On the other hand, cooperation potential is highest when historical contentions are deescalated and threat perception converges. [ABSTRACT FROM AUTHOR]