The region would be more peaceful, after all.
The problem in OTL was that the military got power-hungry (and full of themselves from constant victories)...but lets assume cooler heads prevail.
Well, ask yourself, if Japan hadn't given up its control over all that land, what might we have avoided?
- Cambodian Genocide
- Vietnam War*
- Korean War
- Governmental problems (with Japan breathing down their necks, would anyone in the Philippines** or Indonesia do anything stupid?)
and how many others?
The Chinese Civil War?...well, its possible that, minus the US/Japan war, Japan might have convinced both sides to stop fighting. Though, ultimately, this might be the lone exception.
** = The Philippines may be forced into a "be Neutral or be ours" by this Japan
, not wanting to invite American attacks for invading their ally.
*
if it takes place, Vietnam might have been more Japan-vs-China than USSR-vs-US in who the backers are.
And with no Vietnam or Korean Wars, then there will be no hippies - and that can only be a good thing.