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Cablegate: Tokyo Media Reaction - Global Market Reaction

VZCZCXRO4185
PP RUEHFK RUEHKSO RUEHNAG RUEHNH
DE RUEHKO #3821 2320203
ZNR UUUUU ZZH
P 200203Z AUG 07
FM AMEMBASSY TOKYO
TO RUEHC/SECSTATE WASHDC PRIORITY 6626
RUEKJCS/SECDEF WASHDC PRIORITY
RUCPDOC/USDOC WASHDC PRIORITY
RUEATRS/DEPT OF TREASURY WASHINGTON DC PRIORITY
RUYNAAC/COMNAVFORJAPAN YOKOSUKA JA PRIORITY
RHHMUNA/HQ USPACOM HONOLULU HI PRIORITY
RHHMHBA/COMPACFLT PEARL HARBOR HI//N541// PRIORITY
RHMFIUU/HQ PACAF HICKAM AFB HI//CC/PA// PRIORITY
RUHBANB/OKINAWA FLD OFC US FORCES JAPAN CP BUTLER JA PRIORITY
RUALSFJ/COMUSJAPAN YOKOTA AB JA PRIORITY
INFO RUEHFK/AMCONSUL FUKUOKA 2652
RUEHNH/AMCONSUL NAHA 5080
RUEHNAG/AMCONSUL NAGOYA 1675
RUEHKSO/AMCONSUL SAPPORO 3411
RUEHOK/AMCONSUL OSAKA KOBE 6271
RUEHBJ/AMEMBASSY BEIJING 8473
RUEHMO/AMEMBASSY MOSCOW 1825
RUEHUL/AMEMBASSY SEOUL 4538
RUCNDT/USMISSION USUN NEW YORK 5494
RHEHAAA/NSC WASHDC

UNCLAS TOKYO 003821

SIPDIS

SIPDIS

STATE FOR I/RF, PA/PR/FPC/W, IIP/G/EA, EAP/PD, R/MR,
EAP/J, EAP/P, PM;
USTR FOR PUBLIC AFFAIRS OFFICE;
TREASURY FOR OASIA/IMI;
SECDEF FOR OASD/PA;
CP BUTLER OKINAWA FOR AREA FIELD OFFICE;
PACOM HONOLULU FOR PUBLIC DIPLOMACY ADVISOR

E.O. 12958: N/A
TAGS: OIIP KMDR KPAO JA
SUBJECT: TOKYO MEDIA REACTION - GLOBAL MARKET REACTION
TO U.S. SUBPRIME LENDING CRISIS AND SIX-PARTY TALKS -
TOKYO


LEAD STORIES: Front-page stories in Monday morning
papers included press remarks by Prime Minister Abe,
who said he will reshuffle his cabinet on August 27.

1. "Can U.S. Rate Cut Stop Worldwide Stock Plunge?" The
top-circulation, moderate Yomiuri editorialized (8/19):
"In the wake of the downturn in global stock markets,
the Federal Reserve cut the discount rate on its loans
to banks, and this has helped the U.S. bourses rebound.
Optimism, however, is still not warranted.... The Fed
apparently wanted to send a message to financial
markets that the emergency measure was only meant to
deal with the turbulence in the stock market and should
not be taken as a turnaround on monetary policy. The
credit crunch associated with the subprime mess,
however, is extremely serious, and some observers are
predicting that the effects of the rate cut will be
limited. There is also concern that the U.S. economy
may be slowing down. If market anxieties are rekindled,
the stock and foreign exchange markets could become
volatile, and the Fed might be pressured into making
additional rate cuts."

2. "Complete Denuclearization Must Be Pursued" The
conservative Sankei wrote (8/19): "A six-party working-
group meeting on denuclearization of the Korean
Peninsula was held in Shenyang, China. While North
Korea expressed its readiness to implement 'at the
appropriate time' measures in the 'next phase' of
denuclearization, Pyongyang did not reach any agreement
with the other five parties, all of whom are calling
for complete denuclearization.... It is imperative to
have North Korea declare all of its nuclear facilities,
programs, and materials, including its alleged highly
enriched uranium program, and those programs must be
swiftly dismantled. To that end, it is critical that
the other five parties further enhance their unity in
order to press the DPRK to respond sincerely to their
call to denuclearize."

DONOVAN

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