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Interesting post, something to remember when dealing with anyone. Though, culturally aside, In Japan being 'too' honest is rated as a bad trait. Honne and tatemae are issues of inside and outside. A lot of surface politeness masks what is really going on. An attempt at a translation would be the Western equivalent of the use of tact, but Japanese 'honesty' hinges on lots of factors, such as your relationship with the person you're speaking to,the past experiences you have shared, who is witnessing your exchange, where the exchange is taking place, etc.
Of course, some of these same rules apply in Western contexts, but in Japanese society these tend to be more rigidly applied, though recently some are challenging a lot of the tradition with mixed results. To take an example from the news, Horie, the founder of 'Livedoor', attempted to secretly acquire shares of a radio station. What he did was legal, yet his subsequent announcement to the owner, a TV station, that TV was dead (he meant in the traditional sense) rocked the boat and led to a big debate in the Japanese and English dailies about was Horie doing the right thing and did his style belong in Japan. He then also attempted a hostile takeover, but was finally forced to strike a deal with the TV station. Now of course, in his case, if he had been more honest to begin with, he might have found relations with the head of NTV (Nippon Television) easier, but then again I don't know.
So in that sense, honesty is not always the best policy (at least according to my wife who is Japanese).
But on a final note, I remember what someone told me when I was a young man in university working a summer job. I was going up to the main building with another worker by truck, and a worker down at one of the lower ponds (we were working at a state trout hatchery) asked me to fetch him some drinking water. Well, the driver and I went up above and got some things we needed, and then as we were already nearly back to the pond I realized I had forgotten to fill my coworker's thermos. "Oh", I said to the driver, "what should I tell him, I forgot to fill his thermos?" The driver replied,"Just tell him the truth, there's less to remember that way."
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