The Japanese defense ministry says the Lockheed Martin F-35A Lightning’s performance beat that of the other two contenders in the competition for Japan’s F-X fighter requirement.

The ministry says the F-35A also was the cheapest, because the competing Eurofighter Typhoon and Boeing F/A-18E/F Super Hornet would have needed modification for flying-boom inflight refueling.

Japanese industry will be able to make 40% of the aircraft’s “300 components,” according to a Sankei newspaper report that does not say how the parts have been counted. The Yomiuri newspaper says the U.S. government is proposing that Japan build F-35 wings and tails, work that would otherwise go to Lockheed Martin and BAE Systems, respectively.

These reports indicate that Japan will, as expected, retreat from its previous policy of near-complete manufacturing of fighters. But it will retain considerable industrial capabilities, at least in structures. Lockheed Martin is also suggesting that Japan build a final assembly plant, which it is likely to do.

The larger the local industrial involvement in building Japanese F-35s, the greater the likelihood that the country will keep building them after the initial requirement for 42 is filled. Although recent news reports say Japan needs 40-50 F-35s, the defense ministry confirms it will buy 42, the number that industry executives had been expecting. Before the F-X selection was made, Japanese manufacturers urged that the aircraft be built in-country until the late 2020s to replace some of its Boeing F-15Js.

The defense ministry’s argument that the F-35 will be cheaper because it has a suitable refueling receptacle seems extraordinary and may be being presented only for public consumption in a pacifist country worried about government deficits. The argument assumes either that Japan must use flying booms — not the probe-and-drogue system generally preferred for fighters — or that probe-and-drogue equipment could not be cheaply added to the country’s four boom-equipped KC-767 tankers.

Setting out the reasons for its decision, the defense ministry says it gave each contender a score in four areas. A maximum of 50 points was available for aircraft performance, 22.5 for cost, 22.5 for domestic industrial participation and 5 for after-sales support.

It does not explain why the F-35 led in the assessment of performance, except that the result was based on operations research, but the defense ministry adds that it was also judged as having the best after-sales support. The stealth fighter appears to have lagged on domestic industrial participation — because the U.S. government is not expected to allow enough technology transfer to build all of it. Eurofighter agreed to 95% “information-sharing” and Boeing to 70-80%, the Sankei says, without explanation. The information-sharing offer for the F-35 was extremely low by comparison, the paper says.

Eurofighter officials had previously said Japan could build as much of the Typhoon as they wanted.

Eurofighter’s offer particularly appealed to some members of the Diet, according to a newspaper from the Nagoya area, where Mitsubishi Heavy Industries has its aerospace works. Several of them argued in a meeting of the Diet defense committee that Japan should choose the Typhoon for the F-X requirement, to replace F-4EJ Kai Phantoms, and then switch to the F-35.

The defense ministry makes no mention of assigning a value to the risk of buying each aircraft, as its counterparts in other countries often do, especially when considering an order for equipment that is still under development. After repeated delays, the F-35 is now due to achieve initial operational capability with the U.S. Air Force in 2018, with its F-35A version. The effectiveness of Japan’s Phantoms against modern Chinese fighters is increasingly doubtful.

The first four F-35As for Japan are to be ordered in the fiscal year that begins on April 1, 2012, for delivery in 2016. The defense ministry expects them to cost ¥9.9 billion ($127 million) each, not including the cost of running them. That leaves a lot of room for savings when compared with the ¥15 billion unit cost that Defense Minister Yasuo Ichikawa cited in November for further production of the Mitsubishi Heavy Industries F-2 strike fighter.

If Japan were to buy F-35s straight from the Lockheed Martin production line, it could expect the price to fall progressively, but local manufacturing will surely drive up costs — unless involvement in the F-35 program induces the country to relax its ban on arms exports to the point of allowing participation in joint production programs.

The defense ministry projects that Japan will spend ¥1.6 trillion in buying all 42 F-35As and operating them for 20 years.

The cost of buying 70 Kawasaki Heavy Industries P-1 maritime aircraft and running them for 48 years is estimated at ¥2.285 trillion.