|Battle of the Coral Sea|
|Carrier battle, first day|
|Carrier battle, second day|
|Recovery, reassessment and retreat|
On May 3 and 4, Japanese forces successfully invaded and occupied Tulagi, although several of their supporting warships were surprised and sunk or damaged by aircraft from the US fleet carrier Yorktown. Now aware of the presence of US carriers in the area, the Japanese fleet carriers entered the Coral Sea with the intention of finding and destroying the Allied naval forces.
Beginning on May 7, the carrier forces from the two sides exchanged airstrikes over two consecutive days. The first day, the US sank the Japanese light carrier Shoho, while the Japanese sank a US destroyer and heavily damaged a fleet oiler (which later sank). The next day, the Japanese fleet carrier Shokaku was heavily damaged, the US fleet carrier Lexington was scuttled as a result of critical damage, and the Yorktown was damaged. With both sides having suffered heavy losses in aircraft and carriers damaged or sunk, the two fleets disengaged and retired from the battle area. Because of the loss of carrier air cover, Inoue recalled the Port Moresby invasion fleet, intending to try again later.
Although a tactical victory for the Japanese in terms of ships sunk, the battle would prove to be a strategic victory for the Allies for several reasons. Japanese expansion, heretofore seemingly unstoppable, had been turned back for the first time. Even more importantly, the two Japanese fleet carriers were unable to participate in the Battle of Midway which took place the following month, ensuring a rough parity in aircraft between the two adversaries and contributing significantly to the US victory in that battle. The severe losses in carriers at Midway prevented the Japanese from reattempting to invade Port Moresby from the ocean. Two months later, the Allies took advantage of Japan's resulting strategic vulnerability in the South Pacific and launched the Guadalcanal Campaign, which along with the New Guinea Campaign, eventually broke Japanese defenses in the South Pacific and was a significant contributing factor to Japan's ultimate defeat in World War II.
Imperial Japanese expansion
To support these goals, during the first few months of 1942 Japanese forces attacked and succesfully took control of the Philippines, Thailand, Malaya, Singapore, the Netherlands East Indies, Wake Island, New Britain, Gilbert Islands, and Guam while inflicting heavy losses on opposing Allied land, naval, and air forces. Japan planned to use these conquered territories to establish a perimeter defense for its empire from which it expected to employ attritional tactics to defeat or exhaust any Allied counterattacks.
Vice Admiral Shigeyoshi Inoue, commander of the Japanese 4th Fleet (also called the South Seas Force) of the Imperial Japanese Navy (IJN) consisting of most of the naval units in the South Pacific area, advocated the occupation of Port Moresby in New Guinea, which would put northern Australia within range of Japanese land-based aircraft, and Tulagi in the southeastern Solomon Islands. Inoue believed that the capture and control of these locations would provide greater security for the major Japanese base at Rabaul on New Britain. Japan's Naval General Staff endorsed Inoue's argument and promoted further operations, using these locations as supporting bases, to seize Nauru, Ocean Island, New Caledonia, Fiji, and Samoa and thereby cut the supply and communication lines between Australia and the United States, with the goal of reducing or eliminating Australia as a base to threaten Japan's perimeter defenses in the South Pacific.
The Japanese Imperial Army (IJA) supported the IJN's proposals for further advances in the South Pacific and in April 1942, with the navy, developed a plan that was titled Operation Mo. The plan called for Port Moresby to be invaded from the ocean and secured by May 10. The plan also included the seizure of Tulagi on May 2–3, where the navy would establish a seaplane base for potential air operations against Allied territories and forces in the South Pacific. Upon the completion of Mo, the navy planned to initiate Operation Ry, using ships released from the Mo operation, to seize Nauru and Ocean islands on May 15. Further operations against Fiji, Samoa and New Caledonia (Operation FS) were to be planned once the Mo and Ry operations were completed. Because of a damaging air attack by Allied land and carrier-based aircraft on Japanese naval forces invading the Lae-Salamaua area in March, Inoue requested the Combined Fleet to send carriers to provide air cover for the Mo forces.
Admiral Isoroku Yamamoto, commander of Japan's Combined Fleet, was concurrently planning an operation for June that he hoped would lure the US Navy's carriers, none of which had been damaged in the Pearl Harbor attack, into a decisive showdown with his fleet in the central Pacific near Midway Atoll. In the meantime, however, Yamamoto detached some of his large warships, including two fleet carriers, a light carrier, a cruiser division, and two destroyer divisions, to support Mo and placed Inoue in charge of the naval portion of the Mo operation.