This is a fascinating idea, maybe the Empire of Japan forgets about overseas expansion because of this(both ideological focus on draining the place and the financial burden it'd put on EoJ). How about something like this:
- early 19th century. Japanese intellects, while visiting Europe, become both acutely aware of Japan's need for more arable land and the Dutch solution to limited land - finding them from the sea.
- 1875. Korea rebuff's Japan's request for a normalisation of diplomatic relations, leading to a TTL-seikanron debate. The radicals win, and lead a failed military expedition into Korea. Moderate, pro-terraforming faction survives.
- 1880. First attempt at reclaiming land from the sea is done at the Hinuchi-Nada Sea, between Shikoku and Honshu.
- 1900. A weak Korea and China leads to Japanese militarists pursuing war. Both countries lose against Japan, but expansion beyond Formosa and the Korean peninsula is rebuffed by Western powers.
- 1910. Land reclamation from the Hinuchi-Nada Sea is finished, leading to huge amounts of arable land and a land connection between Shikoku and Honshu. The next project is to connect both Kyushu, Honshu and Shikoku altogether, in a massive 50-year project to completely drain the Inland Sea.
- 1920. Flow of foreign investments into the Inland Sea reclamation projects, particularly that of the United States, draws Japan and the US closer. When the Korean Revolution begins to put a toll on Japan's finances, the United States, supports Japan in suppressing the uprising by supplying weapons and 'military experts'.
- 1930. When the global depression hits, the Dollar-Yen Bloc struggle to keep afloat. The Inland Sea reclamation project becomes paramount in lowering unemployment in Japan. When radical expansionism takes hold in the United States, Japan also sees a rise of fascism.