Except that Japan is a major trading partner and our security concerns are similar to theirs. Added to that they are a capable regional power that have the ability to challenge China and a navy China would baulk at engaging. Indonesia has its own internal issues and could do little to assist Australia in the face of a surging China. Other countries we currently align with or are building ties with are Singapore and South Korea. Again both have a credible military capability.Allying ourselves with Japan might not be a good idea. In fact being an ally fo Japan would probably make us a good deal less secure.
If I were to look at alliances I would look closer to home. Indonesia and in fact most of SE Asia have more to fear from China than we do. We could use that as the basis for forming some sort of regional defence pact.
The only concern I have about that is that Indonesia may eventually develop into a bigger threat to Australia's security than China.
Australia's security during the later part of the 21st century will be fairly problematic with the US being a declining superpower and just about every nation in our region building up their own military.
Snubbing Japan in the hope China will behave would appear to be a retrograde step noting we are already aligned with Japan now.