1949 was a watershed year in the development of the Cold War in Asia. Three events of primary importance in the international calculus of balance of power occurred in that year, along with a number of events of secondary importance. Those three events include the August 29, 1949 Soviet detonation of its first atomic weapon, which essentially eliminated the technological military superiority of the United States military over its Soviet rival, the October 1, 1949 declaration of the People's Republic of China, by which the CCP declared its victory in the Chinese Civil War, and the United States, watching Jiang's CCP cross to the Island of Formosa (Taiwan), saw a major disaster in its attempt to defeat communism globally and isolate the Soviet Union, and finally, the establishment of the North Atlantic Treaty Organization (N.A.T.O.) in Europe, whereby the United States and its Western European allies created a virtual wall against Soviet communism that the USSR interpreted as an attempt to isolate and besiege it. These three events deepened the Cold War globally, and had a major impact on the grouping of alliances and power in Asia in particular.
With conventional forces in inferior numbers to those existing in the Soviet Union, particularly in Europe, and a presumed conventional forces numerical disadvantage against Communist China, the United States could not fall back on Atomic weapons to make up for the force gap it perceived once the Soviet Union had gained the bomb. In the eyes of American strategic planners, the move of China to the communist side of the Cold War, and the Soviet atomic bomb were disasters that had to be balanced. North Korea's communist leaders were perceived to be pawns of the Soviet Union and China, but US forces had left the Korean peninsula (with the exception of lightly armed, non-combat intended military advisors), and the United States had left South Korea with few heavy weapons because of distrust of Syngman Rhee. Japan thus became suddenly a strategically important place - the new wall against the spread of communism, and so had to be buttressed and defended.
The United States thus in 1949 began a process that would result, in 1950-51, in a near complete reversal of its earlier occupation policies as regards Japan. Negotiations for a settlement of wartime issues and creation of a peace treaty began. This process was difficult, as Communist China was neither recognized by the United States, nor was it in the mood for reconciliation with Japan. Taiwan was not recognized as representing China by the majority of combatants and occupied powers of World War II, and the question of Japanese reparations was still unsettled. South Korea was also in no mood to settle with Japan after decades of occupation and colonial control.