@GrizzlyMan:
Midway. It completely reversed the balance of power in the Pacific. The Japanese fleet outnumbered the Americans heavily, and most importantly had superior aircraft and aircraft carriers. In only one battle the United States reversed completely and destroyed 4 Japanese CVs to the loss of only 1, and, after that point, the United States was on the offensive.
One may argue that the United States outproduced Japan and could have rebuilt their fleet had they lost the Battle of Midway (or if it hadn’t even taken place). However, the essential fact is that up to that point the US had been almost exclusively defending either its possessions or British/Australian ones. Had the US lost her fleet at Midway, they would have had no battle-ready fleet to attack the Japanese fleets that were still spread out throughout the Pacific. Even when the United States did rebuild a fleet, it would be out of position to do any damage and would take much time to get into the necessary positions. During that time, India or Australia may have capitulated, which would have delt a horrendous psychological defeat to the Americans (remember that in the Pacific psychological warfare was very present: hence the Doolittle raid). Had one of the British powers folded, the US populance may have supported an early peace with Japan, which would be a major victory for the axis. Had Midway been a defeat for the Americans, or had it not taken place, the war would have ended very differently.
I dont think under those circumstances the American people would of considered peace with Japan. The American people wanted revenge and the industrial power of the U.S gave them the ability to inflict that revenge upon the Japanese. Even if the U.S had of sued for peace it would of only been a matter of time before Japan took over all of Asia including British India and then really challenged the United States to an arms race the U.S may not of been able to win.
Psychological warfare in the Pacific is in my mind over rated yes it brought the war home to Japan and helped morale at home because we were finally getting some of our own back, but it only increased Japanese resolve and made the case for continued military control of the government to protect the Japanese people from the “American Threat”.
Midway was a turning point for the fortunes of the Japanese that much is certain and to those who dont understand disparity in industrial capacity and manpower between the U.S and Japan. For the fortunes of the U.S it was merely the logical conclusion considering to the build up of American forces.
As for British and Australian posessions being taken under Japanese control, that wasnt going to happen with the entire British pacific fleet comitted to the defence of Australia as well as the remains of the Dutch navy and also numerous US navy warships based in Australia that would eventually become the 7th Fleet.
Even if the fleet at Midway had of been completely destroyed there was plenty more where that came from, maybe not fleet carriers but plenty of escort carriers, battleships, destroyers and crusiers to fill the gaps in the fleet until such time as new fleet carriers could be brought into service.
Also this doesnt take into account the massive British ship building effort (plus the lend lease plan) that coupled with the Japanese navy tied up protecting their new posessions in the Pacific could of run rampant raiding Japanese supply lines and slowly grinding down Japanese forces. When the British pacific fleet was formed in late 1944 it consisted of:
17 aircraft carriers
four battleships
10 cruisers
40 destroyers
18 sloops
13 frigates
So if that force just one fleet continually travelling together it would of been tough for the Japanese to match that in battle let alone defeat it.