A Sino-Japanese alliance has been proposed since the later days of the Qing Dynasty by Li Hongzhang. And there were many on the Japanese side who were infavor. But ultimately, short-term interests and Japanese pride won out, leading to a series of wars and escalations that would eventually break both countries leaving one a vassal state of the US and the other a communist dictatorship.
Clearly, that didn't work out the way either side wanted.
In 2015, a Sino-Japanese alliance is single greatest nightmare of US foreign politics. If China, Japan, Russia and Korea were to ever get over their petty differences and see the obvious, in-your-face material benefits of an anti-American alliance, the world as a whole would be better off as the power of the US Empire would finally be checked, at least in the Pacific. Japan is the one who refuses to get with the program. They seem to prefer vassalage to alliance as a true sovereign state.
Their fear of Chinese military domination is truly bizarre. How many Chinese troops are stationed in North Korea? How many American troops are stationed in South Korea, or Japan of that matter? Let's not forget how far away the US is from SK vs. China from NK. If China isn't even keen on dominating a tiny country next door, what makes the Japanese think China has any intention of dominating them?
I shouldn't even have to mention the material benefits in trade, finance, infrastructural development, cultural exchanges etc.