How would Japan respond if Australia possessed a much larger cruiser force?
Short answerIt could not simply add an equal fleet because existing Japanese construction, especially Yamato and Musashi, already consumed the available industrial capacity.
NotesJapan, like Italy and Germany, was already close to the ceiling imposed by its industrial base. Britain and Australia might choose to invest earlier and produce a larger force, but only by taking money and labor from air power, the army, or other programs. Japan could respond only with the construction capacity it possessed, and beginning the Yamato class sharply reduced what remained for other ships.