UPDATE: Japan Probe Into Boeing 787 Fuel Leaks Ends, Battery Problem Unresolved

    --Japan's transport ministry concludes its investigation into Boeing 787 fuel leaks

    --The ministry issues corrective orders to the Japanese carriers

    --Cause of recent battery problems remains unresolved, keeping aircraft grounded

    (Adds details of resolution of fuel leak problems in 3rd, 9th, 10th paragraphs, other problems in 11th paragraph, status of larger investigation in 4th paragraph)

       By Yoshio Takahashi 

    TOKYO--Japan's transport ministry said Friday it had identified the likely cause of fuel leaks that were among problems besetting the Boeing 787 Dreamliner, but are still looking into why batteries on the aircraft overheated on two occasions, causing the aircraft to be grounded globally.

    The ministry's air safety regulators concluded that on a Japan Airlines Co. (9201.TO) Dreamliner, foreign matter had stuck to fuel valves, and coating material had been improperly applied, likely causing the valves to remain partly open and allow fuel to leak.

    The regulators instructed JAL and the other Japanese 787 operator, All Nippon Airways Co. (9202.TO), to conduct more rigorous checks on the valves each time the aircraft flies or during inspections. Both carriers said they had received the instructions, but declined to comment further. Boeing representatives in Tokyo had no immediate comment on the ministry's action.

    The resolution of the fuel leak problems doesn't alter the directive that took effect Jan. 16 to ground the 24 Dreamliners operated by ANA and JAL. That order followed two separate incidents in which the lithium-ion batteries on the aircraft overheated, forcing an emergency landing in one case. All 50 of the 787 Dreamliners in service globally are now grounded as a result of the battery problems.

    "The most important thing is the battery incidents. We'll make an all-out effort to identify the cause," said Akihiro Ohta, minister of land, infrastructure, transport and tourism, at a press conference. "It's too early to say that we are over the hump."

    A battery on a JAL 787 caught fire when it was parked in Boston on Jan. 7, and an ANA Dreamliner made an emerging landing in western Japan as a battery overheated on Jan. 16.

    The ministry found that a fuel leak prior to the takeoff of a different JAL 787 in Boston on Jan. 9 may have been caused by foreign matter as small as 1.5 millimeters being stuck on one of the fuel valves, either in the left wing fuel tank or on the pipe connecting the left wing fuel tank and the one in the center section where the wings come together. That allowed fuel to unintentionally flow from the center tank to the left wing tank, resulting in an overflow, ministry officials said.

    Another leak on the same jet on Jan. 13 at Narita airport near Tokyo was likely caused by electrical-insulating coating or part of the coating brush stuck in a switch to open and close a fuel ejection valve in the tip of the left wing, the officials said. That sent a false signal to the cockpit that the valve was closed, even though it was open.

    The ministry instructed JAL and ANA to ensure there was no unintended fuel movement before each flight, and to conduct visual checks of the fuel ejection valve by opening and closing it as part of periodic inspections of the aircraft.

    The officials said the maker of the valve equipment had already revised the production process to improve quality control, and was now working on upgrading it.

    The ministry also disclosed probable causes for three other recent problems with the flagship Boeing aircraft--a brake problem on Jan. 9, a cockpit window crack and a power generator oil leak, both on Jan. 11. The ministry said these matters weren't immediate safety risks, but Boeing and the suppliers were looking into the defects in the braking system and the windshield.

    Write to Yoshio Takahashi at yoshio.takahashi@dowjones.com