Which of the following led to increased tension between the United States and Japan in 1937?

The Nanjing Massacre is the correct answer.

Explanation:

The tension between the US and Japan heightened because Japan sank USS Panay during its assault on Nanjing and a Japanese soldier also slapped the American Diplomat John M. Allison, US government exerted pressure on the Japanese government. Later the Japanese soldiers in Nanjing apologized to Allison. This incident came to be known as Allison Incident. The US government received many reports about the atrocities of the Japanese Army but the two countries were only focused on safeguarding their national interests.