Manchuria, the region of northeast China, was on September 18th, 1931, invaded by the Japanese Kwantung Army. This was the result of the Mukden Incident, where a Japanese lieutenant blew up a small amount of dynaminte by the South Manchuria Railway and thenblamed it on the Chinese. After this Staged event Japan invaded and occupied Manchuria until the end of WW2.
The occupation of Manchuria affects Germany during this time because it had a really negative impact on the moral strength and influence of the League of Nations. This event showed members of the League of Nations how any powerful Nation could commit blatant aggression without serious consequences. This awareness caused Adolf Hitler to follow in Japans footsteps with Czechoslovakia and Poland.