Besides the United States, the other major site of German overseas engagement in the 1870s and 1880s was Japan. This chapter analyzes the imperial bridgehead created by German scholars sent to Japan as the country opened to the West and as the Meiji government sought to reform its administration, economy, law, military, schools and universities in the 1880s. Prominent among them was Karl Rathgen, who had studied under Schmoller in Strasbourg and came to Japan in 1882. Rathgen would spend the next eight years of his life in Japan, working to build the University of Tokyo, reform Japan’s legal code, and modernize its administration and economy. While in East Asia, Rathgen travelled widely and became witness to the fierce competition for weapons sales and industrial export markets in Japan and China between European and American competitors. He also became acutely aware of the precarious position of the German interests in Asia. As German policy shifted toward China in the 1890s and as Japan became more self-reliant, German-Japanese relations cooled. The First Sino-Japanese War in 1895 led to a rupture in relations and the construction of a Japanese “Yellow Peril.”