You need to use the com.nokia.mid.ui.DirectGraphics class to do that as it is not supported in MIDP 1.0:
Code:
import com.nokia.mid.ui.DirectGraphics;
import com.nokia.mid.ui.DirectUtils;
import javax.microedition.lcdui.Image;
// ....
// load the original image
Image originalImage = Image.createImage("/res/somepicture.png");
// create a mutable image to hold the rotated image
Image rotatedImage = Image.createImage(originalImage.getWidth(),originalImage.getHeight());
// get the reference to the new image's DirectGraphics object
DirectGraphics dg = DirectUtils.getDirectGraphics(rotatedImage.getGraphics());
// draw the original image using dg's image manipulation (the last parameter)
dg.drawImage(originalImage,0,0,Graphics.TOP|Graphics.LEFT,DirectGraphics.ROTATE_90);