Mitsuko Kawaski, Rui Kitada, Brittany Lang and Julieta Granada are knotted in second place at 4-under-par 68 at Kashikojima Country Club in Shima.
Annika Sorenstam, who has won this event five consecutive years, which is an LPGA Tour record for most consecutive years winning the same event, played average on Friday. She shot a 1-under-par 71 and is part of a group tied for 27th place.
Sorenstam started well on Friday with a pair of birdies at one and four. She parred her next eight holes around the turn, but birdied the par-5 13th to move to minus-3.
Sorenstam, a three-time winner this season, including the U.S. Women's Open, struggled to consecutive bogeys at 14 and 15, but parred her final three.
This event features an elite field of 78 players, 43 from the LPGA Tour and 35 from the Japan LPGA. There is no cut, so golfers will be going for broke and Hetherington flew out of the gate on Friday.
Hetherington birdied the second hole, then closed her front nine with birdies at the par-5 seventh and par-4 ninth. She made the turn at 3-under-par 33, but soared up the leaderboard with her play on the second nine.
The Australian birdied the par-3 11th, then eagled the par-5 13th to move to 6-under par. Hetherington dropped a shot with a bogey at the par-4 14th, but would atone for the mistake quickly.
She collected back-to-back birdies from the 15th to move to 7 under par. Hetherington parred her final two holes to secure her three-stroke cushion.
Hetherington is an eight-time winner on the LPGA Tour, but has not visited the winner's circle in almost three years. She posted back-to-back wins at the Giant Eagle LPGA Classic, where she toppled Sorenstam, Jennifer Rosales and Lorie Kane in a playoff, and the Wegmans Rochester LPGA.
Nabisco Champion Karrie Webb, Akiko Fukushima, Akane Iijima, Aree Song, Sun Young Yoo, Sakura Yokomine, Suzann Pettersen, Young Kim, Candie Kung, Nancy Scranton, Gloria Park, Karine Icher, Meena Lee and local favorite Ai Miyazato are tied for sixth place at 3-under-par 69.