I assume you are talking about the stretch marks and light rust in the paint. Really hard to tell from here. Looks like the lug was under-filled at the head tube, which is rare in a Japanese bike. OTOH, the didn't build a lot of frames that small as far as I know. I guess I would be at least mildly concerned about that frame.
Stewart S&S coupled sport tourer, Stewart Sunday light, Stewart Commuting, Stewart Touring, Co Motion Tandem, Stewart 3-Spd, Stewart Track, Fuji Finest, Raleigh Pro, Trek Cycle Cross, Mongoose tomac ATB, GT Bravado ATB, JCP Folder
As is often the case, removing the paint would give another layer of info. Doing so without marring the surface in a manor that would disturb the evidence is better still. Andy.