What seems to be happening in my game at the moment is a sort of pairing up and face-off arrangement between rival factions.
Up until 1938 the diplomacy seemed pretty random. Germany was flipping between influencing Belgium; Sweden and Norway. Britain was occasionally trying to influence Portugal or South Africa, and Japan wasn't bothering with diplomacy at all.
Then after the Second Sino-Japanese War ended in early 1938, everything suddenly became much more focussed and seems more intelligent. Japan immediately started trying into convince Siam to join the Axis, and Britain stepped in to counter their influence with it's own diplomats. Japan is losing that contest but is still keeping up the pressure.
At the same time Germany switched it's focus and began targeting Persia; Afghanistan and Saudi Arabia, which at the time were drifting towards the Comintern. I've given up trying to keep Saudi Arabia drifting towards the Comintern as even if they joined they are surrounded by Allied and Axis puppets and I'd never be able to protect them. But I really wanted Persia and Afghanistan to join me as a buffer along my southern border. So, I'm keeping my diplomats in those countries even though they are losing the hearts and minds battle against the Germans (+14 to +7). I'm kind of hoping the Germans will give up and withdraw their missions, but so far it's been three months and they're still in there.
The other big face-off is in Romania, which has been drifting towards the Allies for months, and suddenly Germany decided to intervene and send a diplomatic mission to talk some sense into them. But that was immediately countered by a British mission and at the moment Romania is still heading for the Allies.
So, it doesn't look random to me at the moment, in fact, it seems quite intelligent. Although it could just be a coincidence.