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So what happens to the Japanese units that are withdrawn in the Campaign game?
I understand that with the Allies units are being moved to the European Theater, but where do the Japanese units go?
Since the player controls the entire Japanese War effort where are these planes and soldiers going?

Regarding Japanese land units I seem to recall the developers stating it was to model the folding of independent mixed brigades and other support units into full divisions which arrive later. Frankly, a lot of the withdrawals are Thai units which depart in 1944 following the fall of the Phibun government in Thailand.
In addition, some Japanese units were withdrawn or disbanded for various administrative purposes during the war. The same is true of many Allied units whose personnel were deemed more urgently needed in other contingents or tasks.