June 30th
New Guinea:
The Tanaka Squadron enters Milne Bay in the early hours, and finds what is probably an Allied amphibious convoy.
Japanese Ships
CA Tone
CA Chikuma
CA Atago
CA Myoko, Shell hits 2
CA Mogami
DD Oyashio
DD Hamakaze
DD Hagikaze
DD Yudachi
DD Yunagi
Allied Ships
DM Tracy, Shell hits 14, Torpedo hits 2, heavy fires, heavy damage
DM Sicard, Shell hits 5, and is sunk
AG Regulus, Shell hits 11, Torpedo hits 2, on fire, heavy damage
xAK Panaman, Shell hits 18, heavy fires, heavy damage
xAK Pennsylvanian, Shell hits 20, and is sunk
xAK Utahan, Shell hits 16, and is sunk
xAK Chatanooga City, Shell hits 4, Torpedo hits 3, and is sunk
xAK Steel Ranger, Shell hits 21, and is sunk
xAK Jacob Luckenbach
xAK Mount McKinley, Shell hits 26, and is sunk
xAK Admiral Y. Williams, Shell hits 13, Torpedo hits 1, and is sunk
xAK Exmoor, Shell hits 13, Torpedo hits 1, and is sunk
xAP Noordam, Shell hits 28, and is sunk
The Japanese cruiser force gets to fire broadsides at point-blank range of only 2,000 yards, and only Jacob Luckenbach escapes. However, just outside the bay, I-165 is awaiting:
Submarine attack near Milne Bay at 101,133
Japanese Ships
SS I-165
Allied Ships
xAK Jacob Luckenbach, Shell hits 2, Torpedo hits 2, on fire, heavy damage
xAK Jacob Luckenbach is sighted by SS I-165
SS I-165 attacking xAK Jacob Luckenbach on the surface
Thus the Allies lose 10 transports, 1 big and valuable troop transport(xAP) and 2 long range (mine) destroyers.
Across the Solomon Sea, the Allied destroyer force of 5 pursues the Japanese, but after daybreak, relief force of 4 Japanese cruisers makes contact near Bougainville:
Japanese Ships
CA Takao, Shell hits 1
CA Furutaka, Shell hits 1
CL Kashima, Shell hits 6, heavy fires, heavy damage
CL Yubari, Shell hits 1
Allied Ships
DD Bagley, Shell hits 1
DD Craven, Shell hits 3, on fire
DD Gridley, Shell hits 3, heavy fires, heavy damage
DD Crane, Shell hits 5, and is sunk
DD Kilty, Shell hits 3, and is sunk
Cruiser Kashima is heavily damaged as the contact was made at short range and the US ships concentrated their fire on her. 3 hits penetrated her belt armor, while the others hit her in the superstructure. Her ammunition magazines are now flooded, and shes trying to make it home, her escorts helping to put out the small fires still left, I give her 50-50% chances.
Once the Japanese gained more distance to the Americans, the Americans' hits no longer gained penetrating hits, while the Japanese cruisers Takao and Furutaka hit all of the Americans multiple times with their 200mm main guns shooting high-trajectory shots at 20,000+ yards, both side/belt and deck penetrations were reported. The Japanese force scores 2 confirmed kills and Gridley as a probable, all of the Americans getting damaged.
EDIT:
Aerial reconnaissance over Milne Bay confirms the presence of a small troop force, probably an engineer unit or a base force, while it could also be some poor infantry battalion. Why they needed 13 ships to move that battalion there is a mystery.
Regarding Kashima, her what now seems as a probable loss, for months if not for good, is purely my fault. Attaching an old 18-knot cruiser intended to escort convoys and lay mines with 3 33-knot heavily armed, thick skinned monsters, was just asking for trouble. Instead of 2 depth charge racks and 12 shots the force might as well have gone with 0, not that any WW2 era submarine submarine will manage to pull a firing solution on something that cruises at 33 knots... The sub needs Harpoon missiles to do that.