From: Hendaye, France
the 'Panay Incident', when aggressive IJ airmen sank USS Panay (12 Dec 1937), was a bell-weather in alerting the US public to aggressive IJ moves in China, another step in the long road to full-scale war. IJ was thoroughly embarrassed by the sinking of the Panay, conducted a full-scale internal investigation, then released its results to the US, made a diplomatic apology & paid an indemnity to the USA. but the PR damage was done.
youtube vid that you linked looks more like a 'propaganda' newsreel that would've been shown in US theaters 2-4 years later.
More info here: http://www.combinedfleet.com/Panay_t.htm
"If I go away to sea, I shall return a corpse awash, if duty calls me to the mountain, a verdant will be my pall, thus for the sake of the Emperor, I will not die peacefully at home...."