Japan is as vulnerable in 1931 to economic sanctions, as in 1941. In 1905 the threat of the loss of credit in US banks helped persuade Japan to negotiate with the Russians. Either Roosevelt or Hoover could think economic pressure would work again.
Hoover was quite firmly against economic sanctions. He was willing to cooperate with the League in "moral pressure" (and even that was going further than the US had gone before--there was a time during the Harding administration when the US didn't even answer correspondence from the League!) but that was all. As he explained it:
"The whole transaction is immoral. The offense against the comity of nations and the affront to the United States is outrageous. But the Nine-Power Treaty and the Kellogg Pact are solely moral instruments based upon the hope that peace in the world can be held by the rectitude of nations and enforced solely by the moral reprobation of the world. We are not parties to the League of Nations, the covenant of which has also been violated.
"The problem lies in three parts:
"First, this is primarily a controversy between China and Japan. The United States has never set out to preserve peace among other nations by force and so far as this part is concerned we shall confine ourselves to friendly counsel. In this connection we must remember some essentials of Asiatic life. Time moves more slowly there ; political movements are measured in decades or centuries not in days or in months ; that while Japan has the military ascendancy today and no doubt could take over parts or all of China, yet the Chinese people possess transcendent cultural resistance ; that the mores of the race have carried through a dozen foreign dynasties over three thousand years ; that the Chinese are ten to one in population. No matter what Japan does, in time they will not Japanify China, and if they stay long enough they will be absorbed or expelled by the Chinese. For America to undertake this on behalf of China might expedite it but would not make it more inevitable.
"There is something on the side of Japan. Ours has been a long and deep-seated friendship with her and we should in friendship consider her side also. Suppose Japan had come out boldly and said:
" *We can no longer endure these treaties and we must give notice that China has failed to establish the internal order these treaties contemplated. Half her area is Bolshevist and co-operating with Russia, the government of Manchuria is in the hands of a military adventurer who ignores the Chinese Government, and China makes no effort to assert her will. That territory is in a state of anarchy that is intolerable. The whole living of our people depends upon expanding the sales of our manufactures in China and securing of raw materials from her. We are today almost economically prostrate because there is no order in China. Beyond this with Bolshevist Russia to the north and a possible Bolshevist China on our flank, our independence is in jeopardy. Either the signatories of the Nine-Power Pact must join with us to restore order in China or we must do it as an act of self -preservation. If you do not join we consider we cannot hold to an obligation around which the whole environment has changed."
"America certainly would not join in such a proposal and we could not raise much objection.
"Second, our whole policy in connection with controversies is to exhaust the processes of peaceful negotiation. But in contemplating these we must make up our minds whether we consider war as the ultimate if these efforts fail. Neither our obligations to China, nor our own interest, nor our dignity require us to go to war over these questions.
"These acts do not imperil the freedom of the American people, the economic or moral future of our people. I do not propose ever to sacrifice American life for anything short of this. If that were not enough reason, to go to war means a long struggle at a time when civilization is already weak enough. To win such a war is not solely a naval operation. We must arm and train Chinese. We would find ourselves involved in China in a fashion that would excite the suspicions of the whole world.
"Third, we have a moral obligation to use every influence short of war to have the treaties upheld or terminated by mutual agreement. We should co-operate with the rest of the world ; we should do so as long as that co-operation remains in the field of moral pressures. As the League of Nations has already taken up the subject, we should co-operate with them in every field of negotiation or conciliation. But that is the limit. We will not go along on war or any of the sanctions either economic or military, for those are the roads to war."
https://archive.org/stream/foreignpolicieso011105mbp/foreignpolicieso011105mbp_djvu.txt
Could Hoover have gone further than "moral pressure" and non-recognition? Secretary of State Stimson wanted him to--but I really doubt that public opinion would have allowed it. The US was preoccupied with the deepening Depression, and the Hearst press headline probably summed up American attitudes toward the Far East crisis: "WE SYMPATHIZE. BUT IT IS NOT OUR CONCERN."
https://books.google.com/books?id=Kig4DQAAQBAJ&pg=PA213 As Richard Hofstadter once observed, if Hoover had taken a belligerent stand against Japan, critics would be quick to say that he was trying to distract public attention from his failures in dealing with the Depression.
And besides, US sanctions alone would probably have little effect unless joined by other nations. Sir John Simon sure didn't sound like he was anxious to confront Japan:
https://en.wikipedia.org/wiki/John_Simon,_1st_Viscount_Simon