The vertical writing on the right is a good luck message, and to the left of that is the recipient's name: Ōmori Yasuyo (some slight doubt about the given name Yasuyo, because it sounds like a girl's name, but I suppose it can be a male name also). The family name is Ōmori.
The giver of the flag is Matsubara Yosomatsu. There was a person with this name who lived in the southern part of Japan, who eventually became president, and then chairman of Hitachi Shipbuilding.
There is a group called the Obon Society who works on repatriating WW2 items. The Japanese consulate nearest you should also be able to help repatriate this item.
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