The post cold war era (1991 onwards) did not much influence the relations between Pakistan and Japan. However, nuclear explosions undertaken by two major countries of South Asia in May 1998 strained relations between Japan and Pakistan. The former imposed economic sanctions against India and Pakistan and severely condemned nuclear proliferation in the region however 9/11 incident and self moratorium by Pakistan compelled Japan to lift the sanctions. Japan held the problem of Kashmir as the main cause of tension between the two rival countries and offered to hold international conference. The nuclear tests undertaken by India and Pakistan increased fear of Japan for likely breaking of nuclear war between the two countries. It held that problem of Kashmir is behind the nuclear tests.1 Pakistan has been receiving bilateral and multilateral aid from Japan. Latter has been extending Official Development Assistance to Pakistan since 1960. It was extended due to Pakistan’s political role in South West Asia, Islamic countries and maintenance of its traditional relations with Japan and its geo-strategic position. Pakistan is the beneficiary of General System Preferences (GSP) introduced by Japan. Although GSP is meant to encourage the imports but its conditions are strict on the commodities in which developing countries have competitive edge for example, textile and footwear but conditions are most lenient for the products in which developing countries are less competitive, such as machinery which limits June 4, 1999, Associated Press of Pakistan.. the significance of the GSP scheme. Thus, Pakistan could not take much benefit from the scheme as it ultimately contributed to Japan. The cordial and warm relationship between Pakistan and Japan got new impetus when both joined U.S-led coalition on war on terror. Though, there were exclusive reasons which motivated both the countries to join the coalition but common factors also contributed in this regard. Emergence of new convergence in relations between Pakistan and Japan benefited the former. Latter withdrew its economic sanctions against Pakistan imposed in view of atomic explosions in May 1998, restored Official Development Assistance and rescheduled its loan. The immediate objectives of war on terror were to uproot hide outs of Al- Qaeda and install democratic government in Afghanistan where as long term objectives are to destroy terrorist organizations of global reach and their networks including finances. The coalition on war on terror will have to go for indefinite period to combat terrorism. Thus, being partners of the coalition, Pakistan and Japan should evolve mutual long term strategy. Moreover, both the countries should develop common policy outside the coalition which must go beyond the status of Pakistan as a front line state. Japan is pursuing India and Pakistan to sign the NPT and the CTBT. Both the countries have not turned down Japan’s urge of signing of CTBT in clear terms. Pakistan should see its interest beyond India and link it with the United States. Signing the CTBT by India cannot extend defense shield to Pakistan as it has received threats from terrorists and sympathizers of India. Pakistan wants to maintain minimum defense capability. Moreover, India has developed nuclear arsenals and Pakistan considers it as a threat to its very existence. Compelling by the situation, it had to go for option of acquiring nuclear technology and developing atomic bomb. Japan is not in a position to pressurize India to such an extent that it may bow down to Japanese demand and sign NPT and CTBT. Moreover, it also seems impossible that Pakistan will accept Japanese pressure in this regard. However, it may be concluded that irritants like NPT and CTBT will not much influence Pakistan and Japan relations and political and economic ties between the two countries will grow stronger day- by- day.