Discussion

Explanation:

The paragraph begins with sentence E. The sentence inserts the idea of the close call the Australians faced.
Sentence D puts in the facts, capture of Solomon Islands and much of New Guinea, apparently by the Japanese (since we are only talking about these two countries).
Sentence C continues the idea (Australian military aware of hopeless situation), Australia planning to defend main cities.
Sentence B substantiates that– it could have been no more than a delaying technique. E concludes as it gives the reason that even if the Japanese were close, why they got deflected. Therefore, we get the sequence as EDCBA. 

Hence, the correct answer is option 1.

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