In the 1967 film, You Only Live Twice, 007 slept with multiple Japanese women, and Japanese intelligence officers were depicted as dependable allies. Was this movie controversial at the time, given WWII was such a recent memory?

Oh boy James Bond! It's a pretty simple question to answer so upfront I'll just say: No there was not any kind of significant controversy surrounding the films portrayal of the Japanese as stalwart allies of the Western powers in the Cold War. And the reason for this is simple: they were our allies.

But that's a little boring on its own so I'll go into a bit more detail: Effectively at the end of WW2 occupation of the Axis powers and their territories were split between the Allied powers largely according to pre-made agreements at Yalta for territory and spheres in Europe. In Asia however the occupation zones and spheres were much more haphazard. The sudden entry of the USSR into the Pacific war threw a wrench into things that was not entirely anticipated. This led to the division of Korea, played a large role in the changing tide of the Chinese Civil War, and subsequently a realignment of the political order or East Asia. Unlike Germany however, the occupation of Japan was not split between East and West (not counting South Sakhalin which was incorporated directly into the USSR). Japan was solely occupied by the Western powers and particularly the United States.

The United States occupation of Japan had an issue with shifting goal posts. Firstly they wanted to stabilize the country and ensure a smooth transition to peacetime occupation. This involved an influx of grains and milk to combat the near-famine that Japan was experiencing and the disarmament of its massive military (which was not entirely successful as some small portions of the Japanese military stayed overseas frequently to participate in ongoing conflicts like the first Indochina war or the Chinese Civil War). Part of this goal included banning Japan from waging war at all, this is a clause still enshrined in the Japanese constitution and remains controversial, though it is still a largely popular clause in Japan today. It also included punishing those who had set up the militarist government and hopefully reforming Japanese institutions to make them less militarist or at least less capable of militarism.

However the rapidly developing Cold War meant that certain ideals would have to be brushed aside and certain steps would have to be taken to help make Japan a strong, western-aligned power in East Asia. This was represented in the "Reverse Course" wherein the US policy shifted to focus on strengthening Japan rather than punishing it. To this end, some figures who likely should have faced charges for war-crimes and crimes against humanity were let off the hook. Notable examples would include Nobusuke Kishi (known colloquially today as the "Monster of the Showa Era") who ran Manchuria with an iron fist, taking slaves by the tens of thousands and profiting heavily off the opium trade to finance his lavish lifestyle. He would later become Prime Minister of Japan from 1957-1960 and is the grandfather of recent prime minister Shinzo Abe. A more controversial "pardon" would be Emperor Hirohito, whose role and agency in the war are incredibly controversial topics in Japan today. Simply put: many figures of the Statist era would be reintegrated into the reformed Japanese government because they were either useful or expedient for the rapidly developing anti-soviet needs of US foreign policy.

With the victory of the Communists in China and the outbreak of the Korean War the US now was in a position wherein a militarily strong Japan was desirable. So a rearmament of Japan began, in a way that was still suitable to correspond with Article 9 (anti-war article). This is why today Japan has the eighth largest military budget despite not officially being able to declare war, in keeping with this the Japanese military is known as the "Self Defence Force". This military was formed in 1954, shortly after the end of occupation, but the basis of it originates from the start of the Korean War wherein the Japanese formed a "National Police Reserve" of tens of thousands of "police" with small arms.

So this was all done to make Japan into a strong economic and military power for the Cold War, a shift that was rapid and went against the grain of wartime rhetoric. But with the emergence of what was now being portrayed as an even greater threat (The Communists) it was not particularly hard to publicly justify this rapid pivot of opinion towards the Japanese. Indeed this is a recurring theme throughout the Cold War, the enemy of my enemy is my friend. And it was not much more difficult to shift public opinion in favor of Japan than it was to shift public opinion against them during the war. There was now a great enemy threatening the US, and the Japanese were among the first and best defensive lines against them.

Thus in Cold War culture and spy films, the Japanese could effectively be portrayed as sort-of "the good guys" of Asia. They were the strongest allies to NATO in the region in terms of their economy, military, and politics and that was far more important than what "some crazy generals" did a few years ago.

For more reading a good general history would be "A Modern History of Japan" by Andrew Gordon. "Hirohito" by Herbert Bix also covers this remolding of Japan in the post-war years.