Are Japanese more hypocritical with foreigners ?

[GodEmperorLeto]

IMO some westerners have a problem with this because of their overly strict perspective of truth and non-truth (or lying, if prefer). However, Japanese don't consider lying a bad thing in consideration of the other person's well being. (This is probably the crux of your argument.) Rather than being "honest" and contentious, Japanese would rather be "false" and keep a harmonious relationship. Both ways can cause problems for society but which way is better? Who knows.
See this article: http://sfgate.com/columnists/morford/

Honne and tatemae contributed to the general populace's attitude toward militarization during the early 20th century. These concepts are antithetical to democratic sentiment. A democracy, or at least a democratically inclined republic, must have contention. Without it, people become sheep.

The new generation's difficulty with these concepts is endemic of larger cultural change. They are trying to strike a balance between this aspect of their culture and the need to have strong feelings about politics and foreign policy. At some point, Japanese society may shrug off the old concepts altogether, relegating them to the past. Somehow, though, I doubt it.