Remember the Mitsubishi F-2?
The Japanese want indigenous modern warplane manufacturing capability, as emphasized by their development and production of the Mitsubishi F-2 (F-16 on steroids). Japan builds 60% of the aircraft, including the composite wing, with one more weapons station than anyone else's F-16's have. Production began in 2000 and continues through 2010 for over 100 planes.
Working on this new fighter keeps their design group intact. Also, it puts them in a good bargaining position when negotiating F-22 or F-35 deals ... "We could just keep developing our own F-22sushi".
Why slap those Jurassic paddles on the exhausts though, especially on a exhibition mockup?? OK fine for a dynamic flight development prototype, an actual flight article, until the stealthy models are available. It just doesn't make since.