How did the League of Nations respond to Japan's invasion of Manchuria?

The League of Nations responded to Japan's invasion of Manchuria by setting up the Lytton Commission to investigate the Japanese invasion of Manchuria. Its report assigned blame both to Chinese nationalism and to Japanese aggression. At the same time, the League of Nations refused to give the puppet-state Japan set up in Manchuria, Manchuko, official recognition. Japan's response was to leave the League of Nations and continue the course it had started.
Ultimately, the League of Nations' response here is consistent with more long-standing themes relating to the lead-up of World War II. Consider Japan's later invasion of China in 1937, or Italy's invasion of Ethiopia (1935), or the aggression of Nazi Germany, beginning with its occupation of the Rhineland (a demilitarized zone under the terms of the Treaty of Versailles) and leading up to its invasion of Poland (at which point the UK and France responded with declarations of war). Across so much of this history, one can observe in the great western democracies a general sense of paralysis in the face of militaristic aggression.

In September 1931, Japan used railway explosion as an excuse to invade China. By February 1932, Japan had conquered the whole area and established their own government there named Manchukuo. Suffering enormously from Japan’s military attack, China appealed to the League of Nations for help. In response to the Chinese claims, the League sent a commission led by a British official called Lytton to investigate the issue. In October 1932, a year after Japan’s invasion, the Lytton Report was published and Japan was found guilty. In February 1933, the League held a special assembly where all its members except Japan voted that the Japanese army should leave China. Japan refused to do so. It left the League and further expanded its aggressive movements. Then the League couldn’t do anything about it because main League members wanted to maintain Japan as a normal trading partner (so economic sanctions wouldn’t work), and no country wanted a war with Japan.