@Vareel:
Do allied ships ‘block’ the movement of Japan boats before war is declared?
No. A sea zone is only hostile if it contains surface warships belonging to a power with which you are at war.
@Vareel:
And if not does Japan have to declare war before doing her combat moves, or can she make all her CMs and then declare war?
When you make a combat move against a power with which you are not yet at war, a state of war immediately results. This means that all sea zones containing surface warships belonging to that power are immediately hostile, so the normal rules of combat movement apply. The only exception is that if your transports start their movement in a sea zone that has just become hostile as a result of the attack they may still load units in that sea zone.
This is a little unclear in the rules, and will be in the FAQ.