3.2L for Japan and 3.5L for the US both produce about the same amount of HP and Torque - the displacement was upped due to fuel requirements, emissions and tuning for the US, I believe, plus as a general marketing gimick. It's basically the same long block, even sharing many of the same rebuild parts/gaskets. I think I read somewhere that Japanese fuel was better so the 3.2L in the US markets suffered a little once the difference in emissions was applied - the 3.5L is supposed to bring it back up to about the same specs. The 3.5L wasn't offered in Japan, even for subsequent, different models that still used a similar engine (Trooper comes to mind - I don't believe the Axiom was ever offered in Japan).

What's interesting is that the original prototype had a Direct-injected supercharged 1.6 liter engine (close relative of the Lotus Elan) said to produce the power of a 2.2 liter motor, which was used for efficiency and economy - essentially producing a "Green"er vehicle before the term became commonly used. It was abandoned due to the extra weight of the production VX (weighed more than the prototype because off-the-shelf parts were used instead of the lightweight aluminum and carbon fiber composites in the prototype). The production vehicle weighed much more than the prototype and needed the extra displacement to push all that weight to decent performance levels.

-- John