Cablegate: Japanese Morning Press Highlights 06/13/07

DE RUEHKO #2655/01 1640517
P 130517Z JUN 07





E.O. 12958: N/A


1) Top headlines

2) Editorials

3) Prime Minister's daily schedule

Political agenda:

4) Latest in Asahi Internet poll on upcoming Upper House election
shows exodus of voters in 20s and 30s away from Prime Minister Abe

5) Former Prime Minister Koizumi's private secretary Iijima predicts
a huge loss for the LDP in the Upper House election, possibly only
taking 40 seats

6) Minshuto President Ozawa, slammed for using political funds to
buy real estate, is considering selling the property

7) North Korea-affiliated Chosen Soren sold headquarters to company
owned by former head of government's Public Security Information
Agency (PSIA)

8) Abe unhappy with sale of Chosen Soren property to company owned
by former PSIA director general 6

9) Governor Ishihara sounds out for post of deputy governor author
Inose, a well-known advisor to then Prime Minister Koizumi on
highway policy reform

10) SIA bombarded with 470,000 calls in 24 hours inquiring about
pension issue but could only handle 17,000

Defense and security affairs:

11) Defense Minister Kyuma: SDF, operating with US warships on the
high seas, may use individual right of self-defense to respond to
enemy if US attacked

12) Japan restarts defense exchanges with China in September, with
possibility of ship visit in October

13) Japan to restart economic assistance to Palestinian Authority

14) Talks between US, Japan for easing beef-import restrictions
focusing on changing age limit from 20 months to 30 months

Economic policy:

15) Draft economic policy guidelines contain controversial "hometown

16) Governors of four major metropolitan cities protest new hometown

17) WTO negotiations start next month, but Japan fears it may be
left out of the loop by EU, US

18) Founder of US fund: Japan is the worst place in the world in
terms of measures to protect corporate acquisitions 11

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Asahi, Mainichi, and Yomiuri:
State eyes settling damages suits by ex-tunnel workers suffering

Nihon Keizai:
Honda to debut clean, fuel-saving diesel cars in Japan by 2009

Social Insurance Agency making recordkeeping errors since 50 years

Tokyo Shimbun:
20,000 people have more than two insurance policy numbers

Ogata grills defense minister over SDF's surveillance of civilians


(1) People's participation essential for flood control
(2) Growing suicides a serious problem

(1) Weak yen and low interest rates don't suit growing economy
(2) Flood summit held

(1) Proceed carefully on civil service reform
(2) New World Bank president must restore international trust and
review system

Nihon Keizai:
(1) Basic Policies for Economic and Fiscal Management and Structural
Reform must be free from pork-barrel largesse
(2) Mitsubishi-UFJ scandals undermine public trust of banks

(1) Former Public Security Intelligence Agency chief must clarify
events leading up to acquisition of Chongryon headquarters
(2) Revision of Private Information Protection Law requires probing

Tokyo Shimbun:
(1) Mitsubishi-UFJ must go back to the basics
(2) Rising land prices

(1) LDP, New Komeito must not put end to office expense issue by
revising Political Funds Control Law

3) Prime Minister's schedule, June 12

NIHON KEIZAI (Page 2) (Full)
June 13, 2007

Attended a meeting of the Postal Privatization Promotion

TOKYO 00002655 003 OF 011

Headquarters in the Diet building. Followed by a cabinet meeting.
Health, Labor and Welfare Minister Yanagisawa and Chief Cabinet
Secretary Shiozaki stayed behind.


Met Shiozaki and Deputy Chief Cabinet Secretary Matoba.

Posed for photos for the Upper House election at the Dentsu Photo
Studio in Higashi Shinbashi, with LDP Public Information Bureau
Director General Katayama present. Joined by Public Information
Department Head Futada.

Met at the Kantei with Matoba. Followed by Foreign Vice Minister

Met members of the New Japan-China Friendship 21st Century
Committee, including Fuji Xerox Supreme Advisor Yotaro Kobayashi,
chairman of the Japanese side.

Attended ceremony marking the 13th anniversary of Takeo Fukuda's
death at the Grand Prince Hotel Akasaka.

Met members of the association of nationwide crime victims "Asu no
Kai" at the Kantei, with Lower House members Yoko Kamikawa and
Yasufumi Tanahashi. Attended a meeting of the Council on Economic
and Fiscal Policy.

Met Policy Research Council Chairman Nakagawa, Policy Research
Council Acting Chairman Kawamura, Upper House Policy Deliberation
Council Chairman Masuzoe, and others. Nakagawa stayed behind.

Dined with Sankei Shimbun President Takehiko Kiyohara and others at
a French restaurant in Nishi-Azabu.

Returned to his official residence.

4) Young people distant from Abe in online poll

ASAHI (Page 1) (Abridged)
June 13, 2007

People in their 20s and 30s are said to have shored up former Prime
Minister Koizumi's high popularity. How will they move now in the
run-up to this summer's election for the House of Councillors? The
Asahi Shimbun conducted an online poll of these younger voters over
the past five weeks from mid-May. Among them, the nonsupport rate
for the Abe cabinet is almost twice the support rate. The Abe
cabinet's support rate is now even lower. In the popularity rating
of political parties, the ruling Liberal Democratic Party is down,
and the leading opposition Democratic Party of Japan (Minshuto) is
up. However, 54% still predict that the LDP will win in the
election, while 25% pick the DPJ. The figures show that their
critical views of the Abe cabinet have yet to affect the election.

TOKYO 00002655 004 OF 011

In 2005, Prime Minister Koizumi dissolved the House of
Representatives for a general election over his initiative to
privatize state-run postal services. At that time, a large number of
voters in their 20s and 30s are said to have backed the LDP. The LDP
also sees them as holding the key in campaigning for the House of
Councillors election. It is difficult for telephone-based and
face-to-face surveys to grasp the opinions of people in these
generations. The Asahi Shimbun therefore conducted an online poll
for the first time. Given the peculiarities of online polling, which
lends itself to extreme results, the Asahi Shimbun analyzed trends
in serial polling.

In the first poll, the Abe cabinet's support rate was 28%, far below
its nonsupport rate at 50%. In the fifth poll, the support rate was
down to 16%, with its nonsupport rate up to 67%. In mid-May, when
public opinion surveys showed steady support for the Abe cabinet,
those in their 20s and 30s were already distancing themselves from
Abe. The figures show that the Abe cabinet has further lost public
support in the wake of the Social Insurance Agency's pension
record-keeping flaws and Agriculture, Forestry and Fisheries
Minister Matsuoka's suicide.

Respondents were also asked which political party or which political
party's candidate they would vote for in the upcoming House of
Councillors election. In response to this question, the LDP stood at
23%, 22%, 22%, 20%, and 18% for its candidates in electoral
districts. The DPJ was at 23%, 25%, 27%, 30%, and 29%. A similar
trend was shown for proportional representation as well.

In the first poll, 16% were "very interested" in the House of
Councillors election. In the fifth poll, the figure was up slightly
to 20%. However, it remains low on the whole. The response of those
"very interested" is noteworthy. Among them, 47% picked the DPJ
while 37% chose the LDP when the fifth poll asked them which
political party they thought would win the election.

5) Former Koizumi secretary Iijima fears LDP will be suffer major
defeat in Upper House election, ending up with 40 seats

TOKYO (Page 2) (Excerpt)
June 13, 2007

Kaoru Iijima, who served as private secretary to Prime Minister
Junichiro Koizumi when he was in office, commented in a speech in
Tokyo yesterday on the Upper House election that will take place on
July 22: "Looking at the issues, such as pensions, I see (the ruling
parties) falling into a terrible situation, ending up with 12 or 13
seats below a majority." He revealed his outlook that the Liberal
Democratic Party (LDP) will suffer a major defeat, ending up with
about 40 seats.

For the ruling parties to maintain their majority in the Upper
House, adding the seats that are not up for election this time, they
need to win 64 seats. Iijima said that the New Komeito would
"perhaps win about 11 seats," expressing his view it would be
difficult for the party to hold on to its current 13 seats.

6) DPJ's Ozawa considering selling properties

SANKEI (Page 5) (Full)
June 13, 2007

TOKYO 00002655 005 OF 011

At a press conference in Kanazawa City yesterday, Ichiro Ozawa,
president of the major opposition Democratic Party of Japan
(Minshuto or DPJ), referred to the real estate his fund managing
organization had purchased and that is registered under his name:
"If that is viewed as a problem, I'll sell it anytime." He indicated
his intention to consider selling it if needed.

His fund management organization "Rikuzankai" purchased 12
properties in Tokyo, Iwate Prefecture and other places, the assessed
value of which amounts to 1.019 billion yen. Ozawa, however, did not
make any specific reference to when, how, and which of the real
estate holdings would be sold.

7) Chongryon sold its headquarters to company headed by ex-PSIA

SANKEI (Page 1) (Excerpts)
June 13, 2007

The pro-Pyongyang General Association of Korean Residents in Japan
(Chosen Soren or Chongryon) had sold its headquarters -- land and
building -- at Fujimi in Chiyoda Ward, Tokyo to a Tokyo-based
investment management company at the end of May, sources revealed.
The background of this deal is drawing attention as the investment
company is headed by the former director-general of the Public
Security Intelligence Agency (PSIA), a government body tasked with
investigating the movements of such organizations as Chongryon.

According to the registers for land and buildings, the headquarters'
land that was some 2,390 square meters and its 10-story concrete
building with two basement levels with the total floor space of
11,700 square meters were sold. The purchase price is unknown, but
given the local government tax on the headquarters' property, the
assessed value of fixed assets is likely to be 3 or so billion yen.
The deal was completed on May 31.

The new owner of the property is Harvest Toshikomon K.K. (Harvest
Investment Management Company), which was founded in September 2006
in Chuo Ward, Tokyo, for such business purposes as investment
management and money lending. The initial representative director of
the company was a man living in Bunkyo Ward, Tokyo, but this past
April, he was replaced by former PSIA Director-General Shigetaka
Ogata (73). The address of the company also was transferred to that
of Ogata's residence in Meguro Ward.

Ogawa became PSIA director-general in July 1993 after serving as
such posts as prosecutor at the Supreme Public Prosecutors' Office
and director of the Supreme Public Prosecutors' Offices' Public
Safety Department. Afterwards, he served as chief public prosecutor
at the Sendai High Public Prosecutors' Office and the Hiroshima High
Public Prosecutors' Office, and in June 1997, he retired from the
post. He still works as a lawyer.

Chongryon operates in the same place even after the sale of its
headquarters. Reportedly, it obtained approval of its parent country
North Korea for this deal.

8) Prime Minister Abe expresses displeasure with the deal

SANKEI (Page 1) (Full)
June 13, 2007

TOKYO 00002655 006 OF 011

Prime Minister Shinzo Abe yesterday expressed displeasure with this
sales transaction of the pro-Pyongyang General Association of Korean
Residents in Japan's (Chongryon) headquarters land and building. He
said, "I'd like (the former director-general of the Public Security
Intelligence Agency (PSIA) to be fully aware of his past career,
even though he now works at a private company." "It has become
evident that Chongryon's members were engaged in crimes, including
abductions," Abe continued. He was replying to questions by
reporters at the Prime Minister's Official Residence.

9) Tokyo governor sounds out Naoki Inose on vice governor's post

ASAHI (Page 1) (Full)
June 13, 2007

It has been leaned that the Tokyo Metropolitan Government began
coordination to appoint Naoki Inose, 60, a writer, as vice governor.
Gov. Shintaro Ishihara plans to pick a person from the private
sector to serve the vice governor's post. Inose's stance of having
dealt with administrative reforms, including reform of public
highway corporations, appears to be highly valued. Ishihara has
said, "Private sector's intellectual power is needed" for the post
of vice governor.

According to those involved, Gov. Ishihara has already approached
Inose to serve in the post. Inose is known for his aggressive calls
for abolishing and privatizing special public corporations. He was
appointed in 2002 by Prime Minister Junichiro Koizumi as a member of
the committee to promote privatization of four public
highway-related corporations. He proposed reform of public-interest
corporations at the administrative implementation council, which
chaired by then Administrative Reform Minister Nobuteru Ishihara,
the eldest son of Gov. Ishihara. He now serves as a member of the
government's Tax Commission and a member of the Decentralization
Promotion Committee.

10) Telephone counseling on pension fiasco: Although there are
470,000 calls in 24 hours, SIA responds to only 17,000 calls

ASAHI (Page 1) (Excerpts)
June 13, 2007

The Social Insurance Agency (SIA) announced yesterday that its new
toll-free telephone service and the hitherto telephone service were
flooded with 469,448 calls asking about pension premium records for
24 hours from 8:30 a.m. on June 11 to 8:30 a.m. on June 12. Of the
469,448 calls, the SIA was able to respond to only 16,979 or
one-28th. At Prime Minister Shinzo Abe's instruction, the agency
hastily increased the number of manpower to respond to calls from
530 to 830. It will mull increasing more the number of manpower to
respond inquiries.

According to the SIA, there were about 20,000 calls in an hour and
the number of calls during the nighttime and the daytime was almost
the same. But many people seem to have called several since their
calls did not get through.

The number of calls on June 8, Friday, was the largest of 262,000,
and the calls decreased to 55,000 on the 9th and 36,000 on the 10th.
The reason for the flood of calls appears to be the SIA's lack of
publicity that it provides the telephone services on weekends as

TOKYO 00002655 007 OF 011

11) Individual self-defense right applicable for SDF vessels to
defend US warships on the open seas, even if far off from each
other: Kyuma

SANKEI (Page 5) (Full)
June 13, 2007

Defense Minister Fumio Kyuma, meeting the press yesterday, referred
to a Self-Defense Forces vessel's act of fighting back if and when a
US warship came under attack on the high seas. "These two ships may
be far off from each other, but if one of the two ships were
attacked when they are working together, it's possible to take it
that the attack is the same as an attack on the other." With this,
Kyuma indicated that an SDF vessel would be allowed to defend a US
naval vessel-even if the two ships are far off from each other-with
an expanded concept of individual self-defense, instead of
exercising the right of collective self-defense. Kyuma also said, "I
think we can do something more in other cases as well with the
concept of individual self-defense."

Meanwhile, a government advisory panel of experts met on June 11 to
study cases that allow Japan to exercise the right of collective
self-defense. In the meeting, the panel took the position that the
SDF would be allowed to "use weapons in order to protect weaponry,
etc.," as stipulated in SDF Law Article 95, if and when these two
vessels are close to each other at sea under normal circumstances.
However, the question is what to do if a US naval vessel comes under
attack when it is separated from an SDF vessel. In this case, the
panel mostly opined that the SDF's counteraction in that event
should be interpreted as act under the right of collective
self-defense, not under the right of individual self-defense. Kyuma
appears to have raised an objection to that panel's view.

12) Japan, China to resume defense exchanges

June 13, 2007

The governments of Japan and China are now in the final stage of
coordination for a visit to Japan by Chinese Defense Minister Cao
Gangchuan in September. If realized, the Chinese defense minister
will visit Japan for the first time in nine and a half years since
Chi Haotian in February 1998. Coordination is also underway for the
first visit to Japan in October by a naval vessel of the People's
Liberation Army (PLA). Tokyo and Beijing intend to strengthen
Japan-China relations by resuming defense exchanges, which have been
postponed due to visits to Yasukuni Shrine by former Prime Minister
Junichiro Koizumi and other factors.

During the Asia Security Conference, held in Singapore in earlier
this month, Chinese authorities informally conveyed to Japan
Beijing's desire to realize Cao's Japan visit between July and
September. In view of the upcoming House of Councillors election and
the mid-August Bon holiday break in Japan, Cao is likely to visit
Japan in September. A PLA naval vessel is expected to visit Japan
after Cao's visit, according to a senior Defense Ministry official.
The Maritime Self-Defense Force plans to send its vessel to China
next year in return.

Through exchanges of defense leaders, Tokyo is expected to urge
Beijing to increase transparency in China's growing defense spending

TOKYO 00002655 008 OF 011

and explain that the ongoing Japan-US missile defense development
project is not against any specific countries. The government eyes
greater regional stability through efforts to build relations of
trust between defense authorities of the two countries.

13) Japan to resume aid to Palestinian government

YOMIURI (Page 4) (Full)
June 13, 2007

Foreign Minister Aso late yesterday held cabinet-level political
talks with Palestinian Foreign Minister Abu Amr at the Iikura State
Guesthouse in Tokyo. Aso told the Palestinian foreign minister that
Japan was considering resuming the now-suspended official
development assistance to the Palestinian government.

14) US beef-exporting facilities, system confirmed; Japan, US to
hold talks on easing import condition to 30 month age limit

NIHON KEIZAI (NIKKEI) (Page 5) (Abridged slightly)
June 13, 2007

The Agriculture, Forestry and Fisheries Ministry and the Health,
Labor and Welfare Ministry will make public possibly today the
results of their inspections of beef-exporting facilities in the
United States. The report says that although the manual contained
some inappropriate points, the system is capable of meeting Japanese
import conditions, such as removal of specified risk materials.
Tokyo plans to resume talks with Washington as early as July on
easing import conditions after explaining the results to the public
and notifying the US of the results.

The two ministries inspected eight US facilities late last year.
Inspected this May were the remaining 27 facilities of the 35 plans
authorized to export beef to Japan, plus one that is expected to
join the US list of beef-exporting plants.

In the wake of the World Organization for Animal Health's (OIE)
designation of the US as a country allowed to export beef
irrespective of cattle age, Washington has been urging Tokyo to
remove the 20-month age limit from its import conditions. But in
view of successive cases suspected to have violated the import
conditions since resuming imports last July, the government is
skeptical that the US request for removing the import condition
would obtain consumer understanding.

Tokyo is expected to conduct talks with Washington centering on
easing the condition to the international standard of cattle up to
30 months old.

15) Draft guidelines on economic and fiscal policy propose hometown
tax, boosting labor productivity

MAINICHI (Page 1) (Excerpts)
June 13, 2007

The government's Council on Economic and Fiscal Policy, chaired by
Prime Minister Shinzo Abe, held a meeting yesterday, in which the
draft 2007 guidelines for economic and fiscal policy were unveiled.
The first guidelines under the Abe administration take over the
challenge of administrative and fiscal reforms from the Koizumi
administration. They also include considerable measures from the

TOKYO 00002655 009 OF 011

viewpoint of spurring the economy. In the run-up to the House of
Councillors election, the guidelines will be the Abe cabinet's
campaign pledge in effect.

Main points in the (draft) 2007 economic and fiscal policy

7 Initiate radical tax system reform, including the consumption tax,
this fall or later.

7 Reduce expenditures in the central and local government budgets as
much as possible in fiscal 2008.

7 Map out a reorganization and streamlining plan for all independent
administrative corporations.

7 Work out a new tax to enable contributions to hometowns.

7 Try to build consensus between the government, labor and
management on raising the minimum wage.

7 Study creating a regional revitalization organ.

7 Start reviewing the distribution of subsidies for managing
national university corporations.

7 Promote preparations for starting negotiations on economic
partnership agreements.

7 Aim at eliminating idle farmland.

7 Look into early introduction of daylight savings time.

16) Four major governors oppose "hometown tax payment"

MAINICHI (Page 5) (Full)
June 13, 2007

The governors of Tokyo, Kanagawa, Osaka, and Aichi Prefectures
yesterday got together in the Metropolitan Government Office. The
four governors adopted an emergency appeal calling for a review of
the government's plan to distribute the local tax revenues of large
cities to local governments, which it calls a "hometown tax
payment." The four governors asserted that the system would ignore
the principle of people paying taxes to the locality in which they
are the beneficiary of public services. They will present the appeal
to the government as early as June 18.

At the request of Tokyo Gov. Shintaro Ishihara, Osaka Gov. Fusae
Ota, Aichi Gov. Masaaki Kanda, and Kanagawa Gov. Shigefumi Matsuzawa
attended the meeting. The four governors opposed the government's
plan, saying that the central government is switching the issue of
decentralization to the redistribution of tax revenue sources from
larges cities to local governments. They demanded the expansion of
tax subsidies allocated to local governments, and the transfer of
tax collection authority to local governments.

17) WTO talks to enter home stretch next week under G-4 lead, with
Japan left out of loop

TOKYO SHIMBUN (Page 9) (Excerpts)
June 13, 2007

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The new round of global trade talks (Doha Round) under the World
Trade Organization (WTO) will enter the home stretch early next
week. In recent talks, the United States, the European Union (EU),
Brazil, and India (G-4) have taken the initiative. Japan, while
being left out of the loop, may be forced to make concessions in
agriculture and other areas. Agriculture, Forestry and Fisheries
Minister Norihiko Akagi and other officials involved are endeavoring
to recover from the setback.

The Doha Round started in November 2001. Although the round was
initially scheduled to end in 2005, it has been extended for more
than two years with no agreement reached. This time, there is a
pressing circumstance for the US. The Trade Promotion Authority
(TPA) the Congress has given to the president is to expire at the
end of June.

Unless a board agreement is reached in the Doha Round, the extension
of the president's authority is likely to be carried over to
sometime after January 2009, beyond the presidential election. Given
this, many persons concerned take this view: "If negotiators fail to
come up with some solution to the present impasse in June, the round
may end in failure or be frozen."

WTO Director General Pascal Lamy has envisioned a scenario in which
major countries and regions first reach a broad agreement and then
an accord, to be sealed in multilateral negotiations joined by all
the 150 members.

In this case, a G-4 meeting to be held around June 19 will be a key
stage, and Japan may be pressed with the contents of an agreement to
be reached by the G-4 group. Minister of Economy, Trade and Industry
Akira Amari said, "We would like to jump into the G-4 meeting,"
indicating a desire to hold a G-6 meeting including Japan and
Australia, besides the G-4 countries.

In the farm sector, a reduction in tariffs will deal a serious blow
to domestic farmers. In an effort to make up for lost time due to
the sudden death of his predecessor Toshikatsu Matsuoka, Akagi has
held teleconferences with his counterparts of the US, India,
Australia, and other countries day after day since assuming office.
He has called for a G-6 meeting, stressing the need of balance
between food exporting countries and food importing countries in

18) Co-founder of Steel Partners: "Japan's anti-takeover defenses
are the worst in the world"

MAINICHI (page 1) (Full)
June 13, 2007

Warren Lichtenstein, co-founder of Steel Partners, gave a press
conference in Tokyo yesterday. Steel Partners has launched an
offensive on Japanese companies, as represented by a proposal to
take over Sapporo Holdings. This reportedly was his first press
conference abroad.

He severely criticized the anti-takeover defenses that Japanese
companies have taken in succession, saying: "Japan's preemptive
anti-takeover defenses are the worst measures in the world." He also
expressed opposition to the countermeasures taken by Bull-Dog Sauce
Co., indicating a stance of confrontation.

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