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Cablegate: Japanese Morning Press Highlights 10/01/07

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UNCLAS SECTION 01 OF 17 TOKYO 004570

SIPDIS

SIPDIS

DEPT FOR E, P, EB, EAP/J, EAP/P, EAP/PD, PA;
WHITE HOUSE/NSC/NEC; JUSTICE FOR STU CHEMTOB IN ANTI-TRUST DIVISION;
TREASURY/OASIA/IMI/JAPAN; DEPT PASS USTR/PUBLIC AFFAIRS OFFICE;
SECDEF FOR JCS-J-5/JAPAN,
DASD/ISA/EAPR/JAPAN; DEPT PASS ELECTRONICALLY TO USDA
FAS/ITP FOR SCHROETER; PACOM HONOLULU FOR PUBLIC DIPLOMACY ADVISOR;
CINCPAC FLT/PA/ COMNAVFORJAPAN/PA.

E.O. 12958: N/A
TAGS: OIIP KMDR KPAO PGOV PINR ECON ELAB JA

SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 10/01/07

Index:

1) Prime Minister's daily schedule

2) Fuji-Sankei poll: Fukuda Cabinet support rate at 55.3 PERCENT ;
Majority or 51 PERCENT of public approve the extension of MSDF
refueling services in the Indian Ocean

Anti-Terrorism Special Measures Law:
3) New anti-terror law will be limited to MSDF providing fuel and
water in Indian Ocean, but no Diet approval will be needed
4) Prime Minister Fukuda does not rule out extension of extra Diet
session, will seek prior consultations with opposition camp on
anti-terror bill
5) Democratic Party of Japan (DPJ) will not respond to ruling camp
request for prior talks on anti-terror bill
6) Defense Minister Ishiba apologizes for correction in fuel amount
provided by MSDF to US forces in Indian Ocean
7) US forces receiving fuel from MSDF engaged in both Afghan air
strikes and Iraq war; deviation of purpose of Anti-terrorism Special
Measures Law
8) 55 PERCENT of MSDF fuel indirectly provided to US warships in
Indian Ocean
9) Diet session to debate charge of diversion of MSDF-provided fuel
in Indian Ocean to Iraq war
10) DPJ to send a fact-finding mission to Afghanistan next month

Foreign Minister Komura at UN:
11) In speech before UNGA, Foreign Minister Komura promises his
government's best efforts to continue MSDF refueling services in the
Indian Ocean
12) Komura in UNGA speech stresses need for UNSC reform

North Korea problem:
13) Japan unhappy with tentative agreement reached in six-party
talks on North Korea nuclear issue
14) Japan to re-extend sanctions on North Korea despite six-party
tentative accord reached
15) Japan in bilateral negotiations with North Korea will focus on
dialogue but its pressure tactic of extending sanctions likely to
rouse DPRK ire

Fukuda in action:
16) Prime Minister Fukuda to visit China in January, postpones
planned US trip until after end of extra Diet session
17) Fukuda to give Diet policy speech today, as debate restarts
after 3-week hiatus
18) Fukuda's office in Gumma gummed up its political fund books by
improperly accepting 2.1million yen donation from government
contractor
19) Government to compile supplementary budget
20) DPJ to bombard ruling camp with over 10 bills in the Upper House
trying to tie up Diet business and shake the Fukuda administration


Burma in crisis:
21) Japan seeking punishment of Burmese soldier who shot cameraman
point blank, and may freeze ODA program
22) Deputy Foreign Minister Yabunaka says Japan may have to review
its relationship with Burma (Myanmar)
23) Chief Cabinet Secretary Machimura: Japan will go along with
international agreement, if there is one on imposing sanctions on

TOKYO 00004570 002 OF 017


Burma

Articles:

1) Prime Minister's Official Residence (Kantei)

Prime Minister's schedule, September 28

NIKKEI (Page 2) (Full)
September 29, 2007

09:01
Attended a cabinet meeting at Kantei. Afterwards, telephoned Chinese
Premier Wen Jiabao, and then, met with Chief Cabinet Secretary
Machimura, and after him, met with Minister of Economy, Trade &
Industry Amari.

11:00
Telephoned South Korean President Roh Moo Hyun.

13:32
Met with Cabinet Intelligence Director Mitani.

14:26
Met with Chair Sugiura of the LDP Research Commission on Expanding
the Size of Regional Divisions and others.

15:09
et with Foreign Policy Bureau Director-General Kawai and Middle
Eastern and African Affairs Bureau Director-General Okuda of the
Foreign Ministry. Later, met with Health Minister Masuzoe.

17:03
Gave a speech at the Kyodo Press Building at Higashi Shinbashi.

19:22
Dined with his secretaries and others at the Chinese restaurant at
Hotel Okura.

21:28
Arrived at his private residence in Nozawa.

Prime Minister's schedule, September 29

NIKKEI (Page 2) (Full)
September 30, 2007

Stayed at his private residence in Nozawa.

Prime Minister's schedule, September 30

NIKKEI (Page 2) (Full)
October 1, 2007

09:17
Attended a special cabinet meeting at Kantei.

10:00
Made an inspection tour of Kantei before moving in.

11:58
Arrived at his private residence in Nozawa.

TOKYO 00004570 003 OF 017

15:30
ad talks with editorial members of press companies.

16:06
Had talks with editorial members of TV broadcasting companies.
Later, had a press briefing with reporters in charge of Cabinet.

17:39
Met the Emperor and the Empress at Haneda Airport, who have just
come home.

18:38 Arrived at his private residence in Nozawa.

2-1) Poll: Fukuda cabinet's support rate at 55.3 PERCENT

SANKEI (Page 1) (Full)
September 29, 2007

The rate of public support for Prime Minister Yasuo Fukuda's
cabinet, which was inaugurated Sept. 26, was 55.3 PERCENT , the
Sankei Shimbun found from its joint public opinion survey conducted
with Fuji News Network (FNN). The nonsupport rate for the Fukuda
cabinet was 28.7 PERCENT . The Fukuda cabinet's approval rating upon
its inauguration marked the sixth highest level since Prime Minister
Morihiro Hosokawa's cabinet with the start of coalition government,
following the cabinets of Hosokawa, Junichiro Koizumi, Shinzo Abe,
Tsutomu Hata, and Ryutaro Hashimoto.

SIPDIS

Respondents were also asked how long they thought the Fukuda cabinet
would continue. In response to this question, 52.9 PERCENT answered
"until around the next election for the House of Representatives."
Respondents were further asked when they thought the next House of
Representatives election should be carried out. To this question,
38.5 PERCENT said the election should be held "during the first
half of next year," topping all other answers. As seen from these
figures, many people seem to think the Fukuda cabinet is to manage
the election and will not last long. In the breakdown of public
support for political parties, the ruling Liberal Democratic Party
stood at 33.9 PERCENT , up 3.4 percentage points from the last
survey taken Sept. 15-16. The leading opposition Democratic Party of
Japan (Minshuto) was at 28.1 PERCENT .

2-2) Poll: More than half support continuing MSDF refueling mission

SANKEI (Page 1) (Abridged)
September 29, 2007

In the joint poll conducted by the Sankei Shimbun and Fuji News
Network (FNN) this time, 51.0 PERCENT supported continuing the
Maritime Self-Defense Force's refueling activities in the Indian
Ocean. Those against it accounted for 39.7 PERCENT .

The proportion of affirmative answers increased 2.3 percentage
points from the last survey conducted Sept. 15-16. The United
Nations Security Council has now adopted a resolution expressing its
gratitude to Japan and other countries participating in antiterror
mop-up operations. Meanwhile, the ambassadors to Japan of 11
countries, including the United States, have also released a
statement calling on Japan to continue the MSDF's refueling mission
in the Indian Ocean. The public understanding of the MSDF's
refueling activities seemed to have deepened with the international

TOKYO 00004570 004 OF 017


community's growing expectations for Japan.

Asked about the survey results, Prime Minister Yasuo Fukuda
commented yesterday: "I think the (public) understanding has been
gradually deepening. However, we must not be overconfident in the
figures. I'd like to continue to talk about this matter in a careful
manner so that many people can feel reassured."

3) New antiterror law for fuel, water supply only

MAINICHI (Page 2) (Abridged)
October 1, 2007

The government will present a new antiterror legislative measure to
the Diet during its extraordinary session in order for Japan to
continue the Maritime Self-Defense Force's refueling activities in
the Indian Ocean. The new antiterror legislation, according to its
outline revealed yesterday, specifies United Nations Security
Council Resolution 1776, which was adopted in September and
expressed appreciation for maritime interdiction operations
involving the MSDF. In addition, the bill stresses that the
international community appreciates the MSDF's role. The
Antiterrorism Special Measures Law, currently in effect for the
MSDF's activities in the Indian Ocean and due to expire on Nov. 1,
requires the government to ask the Diet for its approval of plans to
send the Self-Defense Forces. The bill does not stipulate this
requirement. Instead, it will incorporate activities and areas that
were incorporated in the government's masterplan for the MSDF,
thereby ensuring civilian control.

The government will hold a meeting of cabinet ministers tomorrow to
adopt the new legislation's outline, and the government will also
present it to the ruling parties' project team tomorrow. The newly
planned law is to specify the UNSC resolution in its purpose. In
addition, it will also say the MSDF's activities contribute to the
international community's assistance with Afghanistan's
reconstruction.

The new legislation limits the MSDF's activities to oil and water
supply. The current antiterror law stipulates search and rescue
operations as well as disaster relief operations. The new
legislation will not incorporate these operations. The scope of MSDF
activities is the Indian Ocean, including the Persian Gulf. The
government and the ruling coalition will coordinate to set the newly
planned law's validity at a period of one year from Nov. 2, the day
after the current antiterror law expires.

4) Prime Minister Fukuda does not rule out extension of Diet
session, will seek prior consultations on legislation with DPJ

NIKKEI (Page 1) (Excerpt)
September 29, 2007

Prime Minister Yasuo Fukuda, at a speech at Kyodo News Service on
Sept. 28, expressed his view that he would call for consultations
with the Democratic Party of Japan (DPJ or Minshuto) on the contents
of bills prior to their being presented. The DPJ is the largest
party in the Upper House. He said: "When we consider that from now
on there is the possibility of bills being rejected in the Upper
House, we should discuss the contents with the DPJ prior to
presenting the bill." Regarding the new law to continue refueling
activities in the Indian Ocean, he said: "We are now considering the

TOKYO 00004570 005 OF 017


contents, but it will take a little more time before we present it
to the cabinet for approval." He also indicated that in his view
there would be a need to extend the current Diet session, which ends
on Nov. 10.

5) DPJ decides not to respond to ruling camp's call for prior
consultations on new legislation aimed to extend MSDF refueling
mission

NIKKEI (Page 2) (Full)
September 29, 2007

In an executive meeting of its foreign and defense departments
yesterday, the Democratic Party of Japan (DPJ) decided to decline an
offer by the government and the ruling camp to hold prior
consultations on new legislation designed to extend the
Maritime-Self Defense Force's refueling mission in the Indian Ocean
until detailed information of the actual state of MSDF operations is
disclosed. The main opposition party will relay this decision
directly to Chief Cabinet Secretary Nobutaka Machimura today.

On the new legislation that is being worked out by the government
and the ruling camp, Secretary General Yukio Hatoyama also made this
remark in a press conference yesterday: "We should not easily
respond to an idea of holding consultations when an outline is
compiled."

The DPJ has decided to dispatch its own delegation to Afghanistan
next week in preparation for laying out its counterproposal.

6) Defense Ministry apologizes for correction of amount of fuel
provided

NIKKEI (Page 2) (Full)
Evening, September 29, 2007

Referring to the correction the Defense Ministry has made to the
amount of fuel the Maritime Self-Defense Force provided to a US
vessel in the Indian Ocean in Feb. 2003, Defense Minister Shigeru
Ishiba during a Sept. 29 TBS program offered an apology, saying,
"The mistake occurred due to a data entry error. I apologize for
making a reply that was different from the facts." He then stressed,
"It is important to disclose information. We will properly probe
into why the mistake was made and release the finding."

When he was the director general of the Defense Agency at the time,
Ishiba replied, "The amount of fuel provided was approximately
200,000 gallons, which is equivalent to the amount an aircraft
carrier consumes in a day." Following the point made by a civic
group, the defense ministry corrected the amount of fuel supplied to
800,000 gallons.

Keiichiro Asao of the Democratic Party of Japan (DPJ or Minshuto),
defense minister of the Next Cabinet, pointed out, "Assistance for
operations in internal regions of Afghanistan should be carried out
not in the ocean but in internal regions."

7) US forces receiving fueling assistance from SDF engaged in both
Afghan air strikes and Iraq war; deviation of purpose of
Anti-terrorism Special Measures Law

AKAHATA (Page 3) (Full)

TOKYO 00004570 006 OF 017


September 28, 2007

Diet debate on the supplying of fuel by the Maritime Self-Defense
Force (MSDF) in the Indian Ocean will start in October. The
government and ruling parties intend to present a new refueling
bill, which is described under the coalition agreement of the
Liberal Democratic Party (LDP) and the New Komeito as, "cooperating
with the international community and continuing the war on terror.
However, the activities of the MSDF did not stop at supporting the
retaliatory war against Afghanistan, which is unconnected with the
war on terror, they also included support for military operations
that were deviations from even the anti-terror law, such as the Iraq
war.

Based on the Anti-Terrorism Special Measures Law, which was enacted
in Oct. 2001, a unit of the MSDF dispatched to the Indian Ocean
started in Dec. that year supplying oil on the high seas to US
warships. The government explained that the MSDF unit would assist
by refueling warships of every country participating in Maritime
Interdiction Operations (MIO) to block terrorist forces in
Afghanistan from moving through the waters of the Indian Ocean.

However, when the highest volume of fuel was being provided between
Dec. 2001 and the end of 2002, the US forces were staging air
strikes on Afghanistan from the Indian Ocean. And in Sept. 2006, as
well, air strikes on Afghanistan were resumed by AV8B Harriers
launched from the assault landing craft, the USS Iwo Jima. The
MSDF's activities supported a retaliatory war that killed many
civilians in Afghanistan.

Auxiliary duty became normal situation

After 2003, the US warships operating in the Indian Ocean, in
addition to engaging in the anti-terrorist campaign known as
Operation Enduring Freedom (OEF), held the additional duty of
surveillance operations in the southern part of Iraq (Southern
Watch), which took precedent. The US Navy has revealed that on Feb.
25, 2003, the supply ship Tokiwa provided fuel to the US carrier
Kitty Hawk and other vessels. At the time, the Kitty Hawk and its
fleet formed the leading unit in the Iraq war. According to US Navy
documents obtained by the civic group Peace Depot, the role of the
Kitty Hawk at the time was limited to Operation Iraqi Freedom (OIF),
for the documents did not mention OEF.

According to the US Navy's website, on Feb. 25, 2003, when the
Tokiwa provided the Kitty Hawk with fuel, the carrier's main duty
was Southern Watch. The fuel provided to it thus was diverted
completely away from the purpose set for it under the anti-terror
law. Even after 2004, when there was a pause in large-scale air
strikes on Iraq, the auxiliary role of US warships (in the Indian
Ocean) became the regular one.

According to the Navy's home page, the role of US warships being
provided with fuel by the MSDF, in addition to Maritime Interdiction
Operations (MIO) (in the Indian Ocean), was also OEF and OIF.

What was especially noticeable among the MSDF activities was the
supplying of fuel to landing crafts. The main duty of landing crafts
was to transport US Marines from a Marine Expeditionary Unit (MEU)
so that they could carry out mop-up operations in Iraq. Landing
crafts carried out MIO and OEF in tandem with their transporting MEU
troops.

TOKYO 00004570 007 OF 017

The duties of US warships in the Indian Ocean went beyond operations
against Afghanistan and Iraq. There were also many divergences,
including humanitarian assistance and drills with other foreign
military units. However, after the MSDF provided fuel, what did
those ships do? There has never been a probe into that issue.

8) MSDF's Indian Ocean refueling: 55 PERCENT indirectly supplied
via supply ships

MAINICHI (Page 2) (Abridged)
September 29, 2007

The Defense Ministry yesterday made public details of the Maritime
Self-Defense Force's refueling activities that have been carried out
in the Indian Ocean over the past six years for foreign naval
vessels, including aircraft carriers, under the Antiterrorism
Special Measures Law. The MSDF's fuel supply to supply ships
accounted for about 55 PERCENT of its total refueling. The current
antiterror law stipulates that the MSDF's refueling is only for the
war on terror in Afghanistan and its periphery. The Defense Ministry
is now looking into whether those supply ships refueled vessels
participating in the Iraq war.

Supply ships receive fuel supply and refuel other vessels, including
destroyers. In the case of indirect refueling via foreign supply
ships, it is difficult to find out or identify refueled vessels. In
the Diet, the leading opposition Democratic Party of Japan
(Minshuto) has raised a question about this. According to the
Defense Ministry's International Cooperation Division, the MSDF
carried out 777 refueling services from fiscal 2001 through the end
of August this year, and its fuel supplies during that period
totaled 484,000 kiloliters, including 105 fuel services and 267,000
kiloliters for supply ships. The MSDF's fuel supplies to supply
ships accounted for about 82 PERCENT of its total refueling until
fiscal 2002. However, the Iraq war started after that. Meanwhile,
the MSDF's refueling of foreign naval vessels was taken up in the
Diet as a problem in fiscal 2003. After that, the MSDF's refueling
sharply decreased to 15 PERCENT .

9) Focus in Diet session likely on allegations of Japanese fuel used
in Iraq war; Uncertainty looming over new legislation

TOKYO SHIMBUN (Page 2) (Full)
September 29, 2007

In the extraordinary Diet session to resume next month, the focus of
discussion is likely to be on allegations that fuel provided by the
Maritime Self-Defense Force (MSDF) to US warships in the Indian
Ocean could have been used in the Iraq war. Although the government
plans to compile an outline for new legislation and hopes to launch
a discussion with the Democratic Party of Japan (DPJ) in an effort
to extend the MSDF refueling operation, things may not proceed
smoothly as it expects as long as the suspicion persists.

Peace Depot, a non-profit organization (NPO), pointed out the
suspicion first. According to this organization, official US
documents it obtained showed that a US fleet replenishment vessel
refueled by the MSDF had provided the oil from the MSDF to a US
aircraft carrier that was preparing to participate in the monitoring
operation in Iraq in February 2003, just before the Iraq war began.


TOKYO 00004570 008 OF 017


Then Defense Agency Director General Shigeru Ishiba (now defense
minister) said in a Diet reply that the amount of fuel the MSDF
provided at that time was 200,000 gallons, but the Defense Ministry
corrected the amount into 800,000 gallons after Peace Depot's
announcement. Data released yesterday also revealed that the year
when the MSDF refueling operation was most active was the year
before the Iraq war was launched.

The Antiterrorism Special Measures Law, the basis of the MSDF
refueling mission, specifies that the purpose of the refueling
operation is to prevent and eradicate international terrorism, so
the Iraq war is not endorsed by this law.

Defense Minister Ishiba said in a press conference yesterday: "We
would like to disclose information (on the actual state of oil used
for unintended purposes) upon obtaining approval from countries
concerned and except for classified information." But due to the
difficult process of obtaining approval from countries concerned, it
is uncertain whether the investigation will produce effective
results.

In this connection, DPJ Secretary General Yukio Hatoyama stressed in
a press conference yesterday that the main opposition party would
thoroughly pursue the allegations in Diet interpellations and on
other occasions. He also indicated that the party would not easily
respond to a request (by the ruling camp) for consultations on new
legislation, saying: "We will make a judgment on the propriety of
new legislation through a (Diet) committee."

10) DPJ to dispatch fact-finding team to Afghanistan

ASAHI (Page 4) (Full)
September 29, 2007

Democratic Party of Japan (DPJ) Secretary General Yuko Hatoyama
revealed at a press conference on Sept. 28 a plan to send a
fact-finding team of lawmakers to Afghanistan in early October to
compile alternative measures to the continued Maritime Self-Defense
refueling operations in the Indian Ocean. He stated: "We would like
to visit Afghanistan as early as possible to gather information."

Asked about when the DPJ would display its own proposal, Hatoyama
responded: "I think at least 2 weeks would be necessary before we
compile it." He indicated the outlook that his party would be able
to come up with the counterproposal in mid-October at the earliest.

11) Komura in UN address vows efforts for continued MSDF refueling
operations

YOMIURI (Page 1) (Abridged slightly)
Evening, September 29, 2007

Foreign Minister Masahiko Komura addressed the UN General Assembly
in New York on the night of Sept. 28 (on the morning of Sept. 29,
Japan time). Touching on the Maritime Self-Defense Force's refueling
operations in the Indian Ocean, Komura indicated that Japan would
make legislative efforts for the continuation of the MSDF operations
as a responsible member of the international community.

In addition, touching on the fact that Japanese photojournalist
Kenji Nagai was shot to death in Burma, the foreign minister said:
"It is extremely regrettable that many people, including a Japanese

TOKYO 00004570 009 OF 017


national, were killed or injured in the violent crackdown on
demonstrators."

Komura also highlighted the need to increase the numbers of
permanent and nonpermanent seats on the UN Security Council, saying,
"Faced with diversified threats to international peace and security,
the United Nations is expected to play a greater role than ever." He
also asked for the cooperation of the member countries in order to
produce concrete results during the current session of the General
Assembly through next September.

12) Foreign Minister Komura in UN speech stresses need to reform
UNSC

NIKKEI (Page 2) (Full)
Evening, September 29, 2007

New York, Hiroyuki Nakamae

Foreign Minister Masahiko Komura made a speech during a general
session of the UN Assembly on the evening of Sept. 28 (morning of
Sept. 29, Japan time). In the speech, he underscored the need to
reform the United Nations Security Council (UNSC) and sought
cooperation from member nations so that concrete results can be
produced during the current assembly (until next September). He also
expressed Japan's resolve to settle past accounts, including the
abduction issue involving North Korea and Japan's colonial rule.

Regarding the Maritime Self-Defense Force (MSDF)'s refueling
operations in the Indian Ocean for assistance to Afghanistan, Komura
indicated Japan's intention to continue the operations. Former Prime
Minister Abe was originally slated to make a speech in the general
session. However, following Abe's sudden resignation,
newly-appointed Foreign Minister Komura made a speech instead.

Regarding reform of the UNSC, Komura noted that Japan would aim at
increasing both permanent and non-permanent seats, which is its
policy from before. He urged member nations to come up with draft
proposals for a resolution to reform the UNSC and enter
intergovernmental talks in a concrete manner.

Discussions to reform the UNSC are ongoing at the UN. However, talks
have come to an impasse without concrete proposals. Behind Komura's
speech is a sense of urgency that if no progress is made during the
current session, it would be even more difficult to expect progress
in the next session because of the US presidential election.
Regarding assistance to Afghanistan, he referred to the UNSC
resolution adopted last week, which expressed appreciation for the
maritime interdiction operations by multinational forces, including
the MSDF refueling operations. He welcomed the adoption of the
resolution and said, "We will make efforts for the continuation of
the operations."

Touching on such issues as climate change and assistance to Africa,
which came into focus during the current assembly, too, Komura
underscored that they are areas on which Japan and the UN can
cooperate.

Regarding the abduction of Japanese by North Korea, he said, "It is
essential for the international community to send a strong message
seeking a settlement of the issue as soon as possible." However,
concerning that nation's nuclear issue, Komura simply stated, "Japan

TOKYO 00004570 010 OF 017


will continue its efforts to realize the denuclearization of the
Korean Peninsula through the six-party talks."

13) Japan unhappy with tentative six-party deal specifying limited
number of disablement facilities; Gap with US evident

YOMIURI (Page 2) (Abridged slightly)
October 1, 2007

Satoru Ogawa, Beijing

Negotiators from six countries reached a tentative deal Sunday on
steps toward North Korea's denuclearization and declaration of its
nuclear programs to be taken by the end of the year. The Japanese
government has positively evaluated it, as seen in Foreign Ministry
Asian and Oceanian Affairs Bureau chief Kenichiro Sasae's comment
that it would further advance the denuclearization trend. Further, a
deadline for removing North Korea from the list of state sponsors of
terrorism has not been set, reflecting Japan's standpoint. But Japan
is unhappy with the fact that only a limited number of facilities
have become subject to disablement.

At the same time, a difference in views between Japan and the United
States has also become, with the latter pointing to delisting North
Korea as a state sponsor of terrorism with the aim of prodding the
North into implementing denuclearization steps before year's end.

A Japanese government source indicated on Sept. 30 that the
tentative agreement was only a step toward the second phase composed
of nuclear disablement and the declaration of nuclear programs,
saying: "Although up to 30 PERCENT of the roadmap has been drawn
up, the path beyond that must be determined through additional
talks."

In the six-party talks, Japan demanded the full declaration of
nuclear programs and the disablement of all nuclear facilities be
mentioned in the roadmap to the second phase. Japan's demand came
from the judgment that disabling all nuclear facilities beyond the
three in Yongbyon was necessary for the denuclearization of the
Korean Peninsula.

In the talks on Sept. 28, Sasae underlined the need to fully
implement the (six-party) agreement reached in February without
setting a deadline at year's end. This was intended to warn the
United States not to make compromises to the North and remove it
from the list of state sponsors of terrorism for the sake of
implementation by the end of the year.

14) Japan to extend N. Korea sanctions out of need for continued
pressure to resolve abduction issue

NIKKEI (Page 2) (Full)
October 1, 2007

The government decided yesterday to extend its economic sanctions on
North Korea for another six months, given that there has been no
progress on the issue of Japanese nationals abducted by North Korea.
This policy will be officially adopted by a cabinet meeting to be
held soon. The sanctions include measures to prohibit North Korean
vessels from entering Japanese ports and the North from exporting
any items to Japan. The sanctions were initially imposed in October
last year in reaction to North Korea's nuclear test. This April, the

TOKYO 00004570 011 OF 017


government extended the sanctions by six months to mid-October.

Chief Cabinet Secretary Nobutaka Machimura told reporters in Tokyo
yesterday: "Since there has been no progress on the abduction issue,
we are not in a situation in which we would decide to stop (the
sanctions)." In reference to the Japan-North Korea working group
session on bilateral normalization held in Ulaanbaatar, Mongolia, in
September, Machimura said: "Although the atmosphere was favorable,
there was no substantive progress."

Hearing Prime Minister Yasuo Fukuda emphasizing the need for
"dialogue," some pointed out his difference policy stance from the
tough posture of the former Abe administration. But North Korea has
yet to make a sincere response on the abduction issue, so the
current government also has judged it necessary to continue to apply
pressure on the North.

15) Japan feels sense of accomplishment in talks with North Korea
owing to new dialogue-oriented policy, but extension of sanctions
may draw fire from Pyongyang

TOKYO SHIMBUN (Page 2) (Abridged slightly)
October 1, 2007

Through its talks with North Korea as part of the latest six-party
talks, the Japanese government has felt a certain level of sense of
accomplishment in the North's responses to the issue of Japanese
nationals abducted by the North and other issues. Prime Minister
Yasuo Fukuda's dialogue-oriented policy has apparently prompted the
North react positively about improving relations with Japan.
Nevertheless, Tokyo's decision to keep its economic sanctions
against the North in place is certain to draw fire from Pyongyang.
Striking a balance between dialogue and pressure will be a major
challenge for the Fukuda administration.

Japanese chief delegate and Foreign Ministry Asian and Oceanian
Affairs Bureau chief Kenichiro Sasae yesterday revealed this view to
reporters regarding the Japan-DPRK talks: "Although there was some
difficulty, a basic agreement was reached on continuing discussing
matters of common interest of the abduction issue and the settlement
of past accounts through closer talks."

In the latest multilateral talks, Sasae held a direct meeting with
North Korean Vice Foreign Minister Kim Gye Gwan only once for just
45 minutes on Sept. 28.

But Kim is not in charge of normalization talks with Japan, so
substantial talks were not held on the abduction issue and other
matters.

Despite that, Japan has highly rated the North's response mainly
because Kim in the Sept. 27 plenary session expressed the North's
willingness to "make efforts to improve relations with Japan."

The abduction issue and other bilateral matters will be discussed by
the Japan-DRPK working group. Japan failed to nail down a specific
date for the next meeting for the working group through the
six-party talks.

At the same time, there still remains concern that the United States
might remove the North from its list of state sponsors of terrorism
even if the abduction issue is not settled. Song Il Ho, North Korean

TOKYO 00004570 012 OF 017


ambassador in charge of diplomatic normalization talks with Japan in
the bilateral working group, warned in the past that Japan's
decision to continue its economic sanctions against the North would
have an irreversible ill effect on the talks.

Although Tokyo's decision to keep its economic sanctions against the
North in place might again stall bilateral talks that seemed to have
taken a step forward with Japan's new dialogue-oriented policy,
reducing pressure on the North is unlikely to win public support.

Prime Minister Fukuda has declared that he would settle the
abduction issue. But his administration has already found it policy
toward North Korea creating difficulties.

16) Prime Minister Fukuda likely to visit China in January, US after
extra Diet session

SANKEI (Top Play) (Full)
October 1, 2007

Prime Minister Yasuo Fukuda is now coordinating with Chinese
President Hu Jintao a plan to hold their meeting in early January,
it was learned yesterday. Fukuda is also considering a visit to the
United Stated before the end of the year after the current
extraordinary Diet session closes. He aims to build cooperative
relations with China in order to resolve the pending issue of
China's gas exploration in the East China Sea, as well as North
Korea's nuclear and abduction issues, by strengthening bilateral
ties, while placing importance on Japan-US relations. This was
revealed by government sources.

Former Prime Minister Shinzo Abe revealed in the Japan-China summit
in April his plan to go to China in this year. In his telephone
conversation with Chinese Premier Wen Jiabao soon after assuming
office, Fukuda expressed his willingness to visit China at an early
date. Wen also requested on Sept. 27 former Prime Minister Yoshiro
Mori, who was visiting Beijing, for an early visit to China by
Fukuda.

However, the Japanese government had to set Fukuda's trip to China
for early next year because it expected that the Diet schedule would
not allow Fukuda to leave Japan since a debate on a new bill to
continue the Maritime Self-Defense Force's refueling mission in the
Indian Ocean is expected to encounter difficulties.

Tokyo and Beijing had agreed to compile a joint plan to develop gas
fields in the East China Sea, but coordination has been stalled. The
two countries appear to be hoping to demonstrate friendly relations
at a time when Fukuda visits China, resolving the gas exploration
issue by that time. Therefore, Tokyo and Beijing seem to have
determined that there was not much time if Fukuda visited China this
year.

Meanwhile, Democratic Party of Japan (DPJ) President Ichiro Ozawa is
planning to visit China in December. A source familiar with the
Foreign Ministry said, "The prime minister aims to achieve
diplomatic results bigger than those of Ozawa" by going to China
after Ozawa.

A senior Foreign Ministry official said: "The purpose of Fukuda's
plan to visit Washington before Beijing is to play up his stance of
attaching emphasis to relations with the US" since his foreign

TOKYO 00004570 013 OF 017


policy is regarded as being tilted to China. With an eye on a
temporary suspension of the MSDF refueling mission after the
Antiterrorism Special Measures Law expires on Nov. 1, Fukuda intends
to convey the Japanese government's policy of continuing its
contribution to the international community.

17) Prime Minister Fukuda will deliver general-policy speech today,
set stage for Diet debate after lapse of three weeks

MAINICHI (Page 2) (Full)
October 1, 2007

Shinichiro Nishida

Prime Minister Yasuo Fukuda will today deliver a general-policy
speech at a full session of both the chambers of the Diet, setting
the stage for debate in the Diet, which has been in effect in
"spontaneous recess" for about three weeks in the wake of former
Prime Minister Shinzo Abe's abrupt announcement of his resignation.

The positions in the Upper House between the ruling and opposition
blocs were reversed as a result of the latest Upper House election,
and expectations had been building over Diet debate on such issues
as the pension fiasco and social disparities, but no debate has been
held so far for two months since the election. The extraordinary
Diet session was convened on Sept. 10, but soon after the opening of
the session, it in effect went into recess owing to the ruling
Liberal Democratic Party's (LDP) presidential election. Given that
the current Diet session is to end on Nov. 10, there are only 41
days before the Diet closes. The expiration date of the
Antiterrorism Special Measures Law on Nov. 1 is also approaching.

The government will submit a new bill intended to continue the
Maritime Self-Defense Force's (MSDF) refueling mission in the Indian
Ocean, but the major opposition Democratic Party of Japan (DPJ)
still remains in the same stand of calling for withdrawing the
MSDF.

On the "politics-and-money" issue, the LDP intends to put on hold a
measure for disclosing all receipts of expenses, failing to act in
concert with its junior coalition partner New Komeito, which has
called for disclosure of all receipts.

Meanwhile, the DPJ, by making good use of the reversal of the
positions between the ruling and opposition blocs in the Upper
House, intends to pass a bill aimed at compensating for each
farmer's income and a bill for creating a child allowance system to
pay 26,000 yen monthly in the Upper House and differentiate itself
from the ruling bloc and create a move for a dissolution of the
Lower House. On the "politics-and-money" issue, as well, the DPJ
intends to pass a bill revising (the Political Funds Control Law) so
as to obligate lawmakers to attach receipts of every expense
amounting to one yen or more (excluding the personnel expenses) in
the Upper House and rock the ruling parties.

18) LDP branch headed by prime minister received improper donations
worth 2.1 million yen during Lower House election campaigns from two
companies with contractual relationship with state

ASAHI (Page 39) (Full)
September 29, 2007


TOKYO 00004570 014 OF 017


The Asahi Shimbun has learned that the Liberal Democratic Party
(LDP) Gunma Constituency No. 4 branch headed by Prime Minister
Fukuda (elected from the Lower House Gunma Constituency No. 4)
received donations totaling 2.1 million yen from a cleaning company
and a construction company -- both are contractors for
stated-sponsored public works located in Gunma Prefecture -- on or
around the days Lower House elections were officially announced in
2003 and 2005. The Public Offices Election Law bans companies that
have a contractual relationship with the state from making donations
in connection with national elections and candidates from receiving
such donations.

In response to a question asked by this newspaper, Fukuda's office
replied that it had confirmed that there was no possibility of those
donations causing misunderstanding, and that the office has taken
procedures to return the money to those companies. It also explained
that it was difficult to confirm the details of businesses of the
donor companies. According to the political fund report filed by the
branch office, the cleaning company in Takasaki City donated 1
million yen on Oct. 27, 2003 and on Sept. 1, 2005 respectively. The
construction company in Fujioka City donated 100,000 yen on Aug. 30,
2005. The Lower House election in 2003 was officially announced on
Oct. 28 and the one in 2005 on August 30, 2005.

The cleaning company received orders for cleaning national highways
in fiscal 2003 and fiscal 2005 for 130 million yen and 140 million
yen respectively from the Land, Infrastructure and Transport
Ministry. The construction company received an order worth
approximately 180 million yen from the same ministry for national
highway repair work from March to November, 2005 for March.

19) Government, ruling bloc to compile supplementary budget bill on
scale of 180 billion yen as a result of freezing increase in medical
copayments

MAINICHI (Page 2) (Excerpts)
October 1, 2007

The ruling Liberal Democratic Party's (LDP) Policy Research Council
Chairman Sadakazu Tanigaki noted on a TV-Asahi talk show yesterday
that a supplementary budget bill for fiscal 2007 "may be compiled"
in order to freeze the increase in medical copayments for the
elderly. The government and the ruling coalition intend to shape the
supplementary budget bill by the end of the month and put it forward
in the Diet at the beginning of its ordinary session to be convened
next year. The junior coalition partner New Komeito's Policy
Research Council Chairman Tetsuo Saito, as well, echoed Tanigaki's
view, noting, "That is one approach." Saito indicated that the scale
of a supplementary budget is expected to be 180 billion yen or so.

A ceiling on budgetary requests for a fiscal 2008 budget determined
in August under the Abe administration indicates squeezing the
social welfare-related budget by 220 billion yen. An increase in
copayments was slated for April 2008, but this increase will now be
frozen. This means the increased portion will be paid from the
national coffers. But, if the national coffers' burden in this
regard is carried over to fiscal 2008, the budget will exceed the
budgetary request ceiling. So the government and the ruling parties
have now decided to handle the increase portion in a supplementary
budget for fiscal 2007.

20) DPJ to submit a storm of own bills to current Diet session

TOKYO 00004570 015 OF 017


aiming at tying up session and shaking the Fukuda government

YOMIURI (Page 2) (Excerpts)
October 1, 2007

The Diet will today resume its extraordinary session for the first
time in three weeks with Prime Minister Yasuo Fukuda's policy speech
at the plenary sessions of its two chambers. The main opposition
Democratic Party of Japan (DPJ) is geared up to go on the offensive
to shake the government and ruling parties by submitting more than
ten of its own bills to the current session. The DPJ aims to have
the Upper House, which it now controls, pass its bills, which are
drawn from pledges included in its manifesto for the July House of
Councillors election. In this way, the largest opposition party
plans to demonstrate its strong political presence to the public.

DPJ Secretary General Yukio Hatoyama in a speech yesterday in Mukawa
Town, Hokkaido, referred to a bill to ban the use of pension
premiums for other purposes than pension benefits:

"I think the bill will probably clear the Upper House. But it will
not pass through the Lower House as is. However, there is an enough
possibility that the bill will be enacted if you support our
efforts."

Hatoyama stressed that his party would play up its efforts in
deliberations at the Lower House after the measure clears the Upper
House, while shaking the ruling coalition.

The DPJ initially planed to reduce the number of bills to be
submitted to the ongoing session because it was concerned that it
might be criticized for its insufficient preparations for fiscal
sources to cover the costs of pension administration.

However, the party has now assumed the policy of submitting its own
bills out of fear that the ruling coalition would get all the
credits if bills are enacted through discussions between the ruling
and opposition camps based on Prime Minister Fukuda's
discussion-oriented policy. DPJ President Ichiro Ozawa instructed
the members of the "Next Cabinet" on Sept. 26, saying, "I don't care
about details. I want you to present bills as quickly as possible."

21) Japan to demand punishment of Burmese soldier who shot and
killed Japanese journalist amid civil demonstrations in Burma

TOKYO SHIMBUN (Top play) (Excerpts)
September 29, 2007

The government yesterday decided to demand that the military junta
of Burma (Myanmar) probe into the death of the Japanese photo
journalist, Kenji Nagai (50), after he was shot by security troops
of the military junta who were firing on antigovernment protesters.
The government will seek the punishment of the soldier who killed
Nagai. This stance will be conveyed to the military regime by Deputy
Foreign Minister Mitoji Yabunaka, who arrives in Burma possibly
today. If the Burmese government fails to respond fully to Japan's
request, Tokyo may freeze economic cooperation, mainly in the area
of humanitarian aid.

Late yesterday, Prime Minister Yasuo Fukuda told reporters he
intended to strongly demand a full account of the incident: "I think
it absolutely necessary for them to investigate the incident."

TOKYO 00004570 016 OF 017


Behind Fukuda's strong stance is the emerging proof that Nagai, who
was covering antigovernment demonstrations, was shot by a soldier at
point-blank range.

Chief Cabinet Secretary Nobutaka Machimura gave an account of how
the reporter had been killed at a press briefing yesterday: "The
bullet entered into the lower part of his chest from the right side,
passed through his heart, and exited from the left side of his back.
We've received a report that he would have died instantly of massive
blood loss." Foreign Minister Masakiho Komura, who is now in the
United States, told reporters: "There is the information that the
reporter was deliberately shot to death."

If the reporter was intentionally killed, "Criticism will erupt
among (the Japanese public). In addition, the incident raises
questions about military law," a senior Foreign Ministry official
noted. According to the information that came to the ministry soon
after the occurrence of the incident, it was reported that Nagai was
"shot by a stray bullet."

22) Japan may reconsider relations with Burma in wake of death of
Japanese reporter

NIKKEI (Page 2) (Full)
October 1, 2007

Masahisa Mikawa, Bangkok

In order to deal with the incident of the Japanese journalist, Kenji
Nagai (50), having been shot to death at a time when he had been
covering antigovernment demonstrators in Rangoon (Yangon), Burma,
Deputy Foreign Minister Mitoji Yabunaka (for Political Affairs)
arrived in Burma yesterday evening. According to the Japanese
Embassy in Rangoon, Yabunaka intends to lodge a strong protest with
senior members of the Burmese military junta over the death of the
Japanese reporter and suggest a comprehensive review of relations
with Burma.

Yabunaka intends to stay in Rangoon one night and move today to the
capital of Burma, Naypyidaw, and meet there with leaders of the
military junta, including Deputy Foreign Minister Kyaw Thu. Yabunaka
will demand a full account of how Nagai was shot and urge the
military junta to immediately end the armed crackdown on civil
demonstrations of citizens and monks.

Yabunaka also is expected to explain Japan's intention to reconsider
its loan and grant aid to Burma in protest against the junta's use
of force to oppress democratic forces.

23) Chief cabinet secretary says Japan will follow international
agreement on sanctions against Burma (Myanmar)

NIHON KEIZAI (Page 2) (Full)
October 1, 2007

Appearing on a Fuji-TV talk show yesterday, Chief Cabinet Secretary
Nobutaka Machimura spoke of the question of whether Japan would step
up sanctions against Burma and again indicated a cautious view,
saying: "China is an overwhelming aid-donor (to Burma). If we drive
Myanmar into coming much closer to China, can we bring peace to
Southeast Asia?" On the other hand, Machimura noted, "It is only
natural for Japan to follow an international decision if it is

TOKYO 00004570 017 OF 017


made." Machimura thus indicated an intention to follow an
international decision if it is made at the United Nations Security
Council or at other international organizations.

DONOVAN

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