Unless I misinterpreted the following paragraphs, it does seem that, at least until October (possibly November), the Western Powers accepted Japan's reason for invading Manchuria ... to protect its economic interests. Only when the Japanese not only failed to return to status quo, but expanded their territorial conquests, did the Western Powers recognize that it was not about the treaty.
From Arnold Offner's The Origins of the Second World War pp 96-98:
"Japan's stake in this region, rich in timber, coal, gold, iron, soybeans, and grains, was enormous, and for reasons of national interest and prestige no government in Tokyo would relinquish Japan's holdings or claims to special status in Manchuria. Throughout the 1920's, civil officials had sought to avoid the overt use of force and to protect Japan's Manchurian stake through multilateral agreements with other Great Powers or bilateral negotiations with the Chinese. By the end of the decade, however, Japan's Manchurian -- or Kwantung -- Army and South Manchurian Railroad and territorial officials constituted an entrenched bureaucracy, with a life and commitment of its own. [Offner then talks about their paranoia of Chinese Nationalism, Russian incursions, and foreign competition. Later he discusses the emergence of the Army as a major political force in Tokyo].
Sino-Japanese relations seriously deteriorated during 1928-31, as the Kuomintang sought to end extraterritoriality, built railway lines in Manchuria to compete with the Japanese-owned South Manchurian Railroad, harassed Japanese and Korean citizens in Manchuria, and boycotted Japanese goods. In those three years, there were some 120 cases of alleged Chinese violations of Japanese rights and interests in Manchuria, ranging from excessive taxation to infringement on property rights and unlawful detention. The Japanese concluded that the Chinese intended to force them to abandon their special status in Manchuria, and in the spring and summer of 1931 conditions reached the flash point, first, when Chinese peasants destroyed part of the work of a Korean rice-cultivating community, and, later, when Chinese troops apparently captured and shot a Japanese intelligence officer.
Key military officials in Manchuria and in Japan agreed to act. [there were some discussions about when to act and whether to wait for a coup d'etat in Tokyo first. Then the invasion occurred] Chang Kai-shek ordered a strict policy of nonresistance and appealed to the League of Nations. Foreign response was again tepid. Western nations admired neither the Chinese Nationalist challenge to the treaty system nor Chinese weakness and inability to resist the Japanese, whose mirroring of Western strength and purpose inspired resentment yet admiration.
Manchuria was "a long way off" as French Premier Andre Tardieu said, and his country's primary concern were its investments in Yunnan province in south China and Indo-China. The primary concerns of the British in the Far East were their investments in China proper, from Peking south to Canton and the Crown Colony of Hong Kong. Throughout the Manchurian crisis (and after), the British aimed, as Foreign Secretary John Simon noted at a Cabinet meeting on November 11, 1931, to be "conciliatory" toward Japan, against which "we don't want to apply sanctions", while the Chinese would be told not to rely on others but to play their part and to avoid seeking sanctions under Article XVI of the League Covenant.
American views of the crisis were similar to those of other foreign observers. Nelson Johnson, now minister to China, viewed Japan's military action as a premeditated "aggressive act", but even after the total occupation of Manchuria in January 1932 he felt that Chinese revocation of treaty rights had provoked it all. Japan's error was tactical: that is, instead of using force instead of seeking legal redress through the International Court at The Hague. Above all, Johnson felt that Congress and public opinion should not and would not approve any sanctions, which would only wreck the Japanese economy to the detriment of American trade, while creating revolutionary conditions in Japan."
From Akira Iriye's The Origins of the Second World War in Asia and The Pacific pp 12-13:
[a few paragraphs about internationalism, which was at the verge of collapse at this time] Although the United States was not a member of the League of Nations, it kept in close touch with the nations represented at the Council, which held several meetings following the Mukden incident in response to China's request. To the latter's disappointment, however, the Council at first failed to adopt any drastic measures to sanction Japan, instead adjourning on 30 September after exhorting the two countries not to worsen the situation in Manchuria.
The lack of strong action in support of China reflected the views of officials in Washington and London that it would be best to let the Japanese settle the incident with minimal of outside interference, to see if it really was a case involving a minor dispute over treaty rights. ... For this reason, neither Secretary of State Henry L Stimson nor Foreign Secretary John Simon was willing at the time to condemn Japan's military action as a violation of the pact of Paris. ... Before October, the United States and Britain were reluctant to take that step [of taking China's side], but hoped that the civilian leaders in Tokyo would adopt measures to restore the status quo so as to confirm Japan's commitment to the existing system of international affairs."
Few things are harder to put up with than the annoyance of a good example. -- Pudd'nhead Wilson