During January 1942 the RAN strengthened the allied naval forces in the Java Sea area with the arrival of HMAS Hobart, the little sloop HMAS Yarra, both veterans against the Italian forces in the Red Sea and Mediterranean theatre of war, and three AMS vessels- Ballarat, Toowoomba, and Wollongong. These Australian Merchant Ships, armed to the teeth and seeing action nearly every day, were employed on a variety of tasks ranging from rescuing shipwrecked crews adrift in the notorious Banka Strait, rescuing survivors of enemy action, downed aircraft occupants and maintaining a patrol for the protection of merchant and refugee shipping escaping towards Tandjong Priok. A hopelessly congested port across the Java Sea on the north coast of the Dutch East Indies island of Java, and serving Batavia, the capital. The month of February witnessed a shipping exodus of all types and sizes of vessels fleeing the impending fall of Singapore.
The assembly of the Imperial Japanese army, air and navy forces in southern Borneo, Celebes and the Molucca Islands for the final assault to take Java occupied the greater part of February 1942, during which time air raids were launched at Batavia, the capital, and Surabaya, the main naval base. The Japanese Eastern Force, 48th Division, was concentrated at Jolo Island in the Sulu Archipelago and the 56th Regimental Group at Balikpapan. An Imperial Japanese Navy squadron, under Rear-Admiral Takeo Takagi, of two heavy cruisers and two destroyer Flotillas covered the 41 transports. The Japanese Western Force, sailing from Cam Ranh Bay, and its 56 transports were escorted by four heavy cruisers and two flotillas of destroyers. A striking force of four battleships and four carriers under Vice-Admiral Nobutake Kondo, having refuelled at Kendari, headed for the waters around Java.
Admiral Conrad Helfrich had two naval components to his combined fleet, the Eastern Strike Force at Surabaya and the Western Strike Force engaged in escort duties across the sea-lanes of the Java Sea. On Thursday 26 February a large Japanese expedition of transports protected by warships was reported approaching Java from the north, and it appears to have been in at least three separate task groups. All available Allied ships-of-war were put to sea with the intention of locating and sinking the transports before the enemy landing could be effected. The Eastern Strike Force was under the command of Dutch Rear-Admiral Karel Doorman, flying his flag in the Dutch cruiser De Ruyter, had in his combined surface squadron the other Dutch cruiser Java and destroyers Witte de With and Kortenaer, reinforced by the Royal Navy cruiser Exeter of the River Plate fame, the heavy cruiser USS Houston the Flagship of Task Force Five of the US Asiatic Fleet plus the Australian Leander Class light cruiser HMAS Perth under Captain H.M.L.Waller DSO and Bar, and the British destroyers Jupiter, Electra and Encounter. Doorman, informed of the Japanese sortie, set out at 6.30pm joined by the British China Force that arrived that morning, under orders to attack the enemy convoy. The next day Japanese aircraft shadowed Doorman's squadron and he received confusing reports, unable to locate the enemy vessels he returned to Surabaya on the afternoon of Friday 27 February. Entering the harbour he received the location of 30 Japanese transports, 20miles west of Bawean Island, and set out immediately to intercept.