HalcyonDaze
Contributor
A great read I had was Massey's "Dreadnought". It covers the period of 1850 to August 3rd 1914, and covers the entire evolution of the British and German navies along with other developments by other navies.
It gives great insight on the naval arms race and the foundation for the interwar navies also. Britain was in financial trouble in the early 1900s before the war began, and the treaty took a large burden off the empire and the US. The Japanese just took advantage of it and caught up with the other 2 powers quickly.
As @HalcyonDaze mentioned, when the treaty collapsed in the mid 30s, Japan was ahead in many developments and ships.
Mileage may vary as to how far "ahead" the IJN was. The 60% treaty limit rankled the so-called "Fleet Faction" because Japanese war planning anticipated smashing the US Pacific Fleet and then still having enough combat-capable ships to deal with the Atlantic Fleet. The estimate was that the IJN needed to be at least 70% the size of the combined USN to pull this off. The opposing "Treaty Faction" that included Yamamoto in the interwar years pointed out that the Washington Treaty was more of a limit on the US and UK than Japan. The overall Japanese war plan anticipated a decisive battle that would smash the enemy fleet and force the opponent to sue for peace; it doesn't seem like anyone high up asked how that works when your opponents have 10x or more your war industry and are far enough away that you can't directly attack them.
The IJN knew they could never achieve numerical parity, so the hope was they could build individually more powerful ships to overcome this. While this produced some impressive capabilities, the emphasis on speed and firepower in a lot of designs came with drawbacks. In one particular 1935 incident the IJN's Fourth Fleet sailed into a typhoon and much of the fleet took major structural damage - as they say, the ships were overgunned and underhulled. When Japan pulled out of the naval treaties, it essentially gave the US and UK a free pass to use their full industrial potential (in particular, US shipbuilding was boosted as a means of "economic relief" during the later Depression years). While the Japanese were ahead in areas such as torpedoes and night-fighting, they got surpassed relatively quickly in technology and production. They never came close to matching Allied radar capabilities, their aircraft industry produced some formidable successors to early-war fighters but never in sufficient numbers to replace them, and naval construction only replaced a fraction of their war losses. There was a shocking lack of emphasis on ASW escorts and doctrine which bit them hard once the USN got their torpedoes to actually hit things and go off.