In recent years, Japan has expanded its security policies and become more proactive in its regional security affairs. It is, however, caught between two Great Powers—China and the United States, whose rivalries have significant ramifications on the stability of the Indo-Pacific region. What, then, are Japan’s options for navigating a changing and increasingly volatile regional strategic landscape? Key Japan geopolitical observers have argued for Japan to adopt a grand strategy as a “middle power,” one that can make substantial contributions to maintaining the international order and exert moderate influence in international politics. There are, however, constraints that prevent Japan from fully adopting this role—chiefly, the lack of coercive military force, the dominance of the security identity of domestic antimilitarism, and a US-dependent strategic posture. Using role theory, this paper examines Japan’s “middle power” diplomacy, the strategies it employs, and the limitations of its regional leadership ambitions. It further analyzes Japan’s regional security engagements, its relations with the Association of Southeast Asian Nations (ASEAN) and other “middle powers” in the region (e.g., Australia and South Korea), as well as the implications of Japan’s strategic choices and behavior on the security and stability of the Indo-Pacific.