Hatoyama may be a nutjob in some aspects, but at least he gets (and so do many Japanese) that sixty years of "yeah, but..." declarations of "regrettable" and "unfortunate" are not real apologies and Japan's image and pocketbook are adversely affected by the weaselly way conservative governments have handled these highly sensitive issues.
Frankly, the Japanese should consider themselves lucky that most Americans have not caught on to what the Australians, South Koreans, and Chinese already know about conservative Japanese narratives about World War II (like this and this and this), including those espoused by some in the governments of folks like Junichiro Koizumi, who liked to visit a shrine that officially states that the US forced Japan into World War II and that the Japanese takeover of Korea was legal and justified (and hints that the loss of Korea may be illegitimate).
In 1965, Japan agreed to provide not compensation, but $800 million worth of grants and soft loans, the latter of which had to be paid back. A great deal is made of this money, with some crediting Japan for providing the seed money for Korea becoming the economic powerhouse that it is today.
The argument made seems to utterly ignore the blood, sweat, and tears that South Koreans themselves poured into their economy (as well as the shrewd economic planning of Park Chunghee, who used the money from Japan for the purposes of bettering the national economic outlook instead of individual compensation). Indeed, some deride the crucial component of South Koreans' contribution as "enslavement" itself.
So we have money that was explicitly not compensation and reparations, and a large chunk of it not even being given but merely lent. On top of that, let's consider just how much it was. According to an inflation calculator, $800 million in 1965 was about $5.5 billion in 2010. By contrast, the IMF bailout (which was traded for ROK economic sovereignty, according to some) was at least ten times higher, $55 billion in 1998 dollars. That, too, was money that had to be given back (and it was, early).
The equivalent of $5.5 billion today was a lot of money to Korea back then. It was only a decade earlier that much of the country had been flattened by the Korean War (and isn't it odd that, despite what is seen by many as an irrationally knee-jerk anti-Japanese sentiment, that Japan is so infrequently implicated in the division of the country, even though without Imperial Japan's occupation of Korea, the division would never have occurred?), and that money was needed and worth something.
But lots of countries get aid. The Philippines has received massive amounts of aid from, say, the US, and it is still a bit of a basket case. Ditto with Africa, much of Latin America, and even large parts of Asia. I mean, it's very easy to make the argument that aid itself is not a necessary-and-sufficient factor in economic development. Japan giving the ROK government $800 million in grants and soft loans was by no means Japan guaranteeing a prosperous South Korea. That was done by the Park administration and the KoKos themselves.
So I'm wondering if Japan deserves such a hearty pat on the back as some seem to be giving it.
At any rate, I think a good case can be made (and more than 70 percent of South Koreans agree) that the ROK government which used that $800 million package wisely does nevertheless owe compensation for the victims of Imperial Japan for whom that money was intended. That would be the forced laborers and soldiers for starters; the "comfort women" were not mentioned in 1965 nor were they even acknowledged by Japan until the 1990s, so that's a separate issue that Japan needs to take direct responsibility for. And quickly, as these women are not going to be around forever.
And while we're at it, how about a direct apology from the heads-of-state that is not eroded by the "but, but..." of Japanese domestic politics? Japan is a great country that has, for the most part, been an excellent neighbor in the post-war era. But the backpedaling on and watering-down of expressions of regrettableness, the unwillingness to give up Imperial-era territorial claims, the refusal to compensate victims who weren't even acknowledged until relatively recently, etc., undermine that positive image and contribution. Excuse the crass analogy, but it's like smearing sh¡t on the walls of a well-built house.
[Edit: While this post taks to task right-wing Japanese in power, I am keenly aware that there are other Japanese viewpoints regarding Imperial Japan's past. I wrote about Yasukuni and Hiroshima as "bookends of the contemporary Japanese mindset."]