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Cablegate: Japanese Morning Press Highlights 11/02/07

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UNCLAS SECTION 01 OF 13 TOKYO 005082

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 11/02/07


Index:

1) Top headlines
2) Editorials
3) Prime Minister's daily schedule (Nikkei)

MSDF withdrawal from war on terror:
4) Text of Prime Minister Fukuda's statement on antiterrorism law no
longer in effect (Mainichi)
5) Maritime Self-Defense Force (MSDF) withdraws from refueling
services in Indian Ocean; Party heads meet for 2nd time today to
discuss what comes next (Yomiuri)
6) US, British ships will have to fill the gap left by MSDF
withdrawal from Indian Ocean (Nikkei)
7) Chief cabinet secretary: No problem if MSDF refueled warships
doing MIO, as well as engaged in Iraq operations (Yomiuri)
8) Views of experts Yukio Okamoto and Keio U. Prof. Soeya on the
withdrawal of MSDF from the war on terror in Afghanistan (Nikkei)
9) Impact of stopping six years of MSDF refueling operations in the
Indian Ocean: Japan fears it will lose international trust (Tokyo
Shimbun)
10) LDP hopes to restart MSDF refueling operations by passing new
law; DPJ worried about criticism of its blocking the bill (Mainichi)


Afghan aid:
11) Government to beef up Afghan assistance in order to compensate
in part for end of MSDF services in the Indian Ocean (Sankei)
12) Extra aid for Afghanistan will come from the supplementary
budget (Tokyo Shimbun)

Defense contractor scandal:
13) Defense contractor Yamada Yoko Corporation's president to be
summoned to the Diet to give testimony (Nikkei)
14) Former executive director of Yamada Corp. lavishly treated
former lawmaker Tamura to tennis trips, etc. (Sankei)
15) GE cans Nihon Mirise as its agent in Japan (Nikkei)

Fukuda-Ozawa meeting, round two:
16) Alarm spreads in parties about second meeting between Prime
Minister Fukuda, DPJ President Ozawa, though Ozawa denies rumor of
"grand alliance" (Mainichi)
17) Going into their second meeting, both Fukuda and Ozawa are
forward looking about the possibility of a permanent SDF overseas
dispatch law (Mainichi)

18) Parliamentarian league on the abduction issue to travel to the
US headed by lawmaker Hiranuma (Yomiuri)

19) Prime Minister Fukuda wants to shift LDP policy to emphasize
consumers (Asahi)

Articles:

1) TOP HEADLINES

Asahi, Yomiuri & Tokyo Shimbun:
Antiterrorism Special Measures Law expires; Defense Ministry issues
order for MSDF pullout from Indian Ocean

Mainichi:
Fukuda, Ozawa positive about discussing permanent law for SDF

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overseas missions

Nikkei:
State-run Brazilian oil firm to invest 100 billion yen to establish
Japan unit

Sankei:
Former lawmaker Tamura treated by former executive of Yamada Corp.
to tennis tours

Akahata:
JCP Chairman Shii calls for three challenges to protect Constitution
on historic day of MSDF withdrawal

2) EDITORIALS

Asahi:
(1) Thoroughly shed light on pension record fiasco, including
questioning all former Social Insurance Agency directors general
(2) Personnel appointments requiring Diet approval: Measures eroding
press freedom unacceptable

Mainichi:
(1) Responsible persons must apologize for pension problems
(2) Personnel appointments based on Diet: Measure for totally
unreasonable press restrictions adopted

Yomiuri:
(1) Resolve to resume refueling mission being tested
(2) Completely disgraceful press restrictions imposed

Nikkei:
(1) FRB required to make clear-cut judgment and to take flexible
action on monetary policy
(2) Unconvincing restrictions on prior reporting

Sankei:
(1) Report on pension problem: Regain sense of mission and
responsibility
(2) Prime minister must resolve to resume refueling mission

Tokyo Shimbun:
(1) MSDF withdrawal: It's time to verify lessons learned by SDF
(2) Dragons grab Japan Series title; Reform also necessary

Akahata:
(1) MSDF pullout good chance to make efforts for political
settlement

3) Prime Minister's Official Residence (Kantei)

Prime Minister's schedule, Nov. 1

NIKKEI (Page 2) (Full)
November 2, 2007

09:55
Met with Health Minister Masuzoe at Kantei. Afterwards, met with
Cabinet Special Advisor Kurokawa.

11:03
Met with Deputy Foreign Minister Kono.

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12:58
Attended a memorial service for police officers who died in line of
duty across the country and people who died when they cooperated
with the police at Grand Arc Hanzomon Hotel.

14:25
Met with Deputy Prime Minister of Qatar al-Atiyah at Kantei.

15:00
Met with Lower House member Shinya Ono. Later, met with Natural
Resources and Energy Agency Director-General Mochizuki.

16:03
Met with Minister of State for People's Life Kishida. After him, met
with Kyodo News Agency's Editorial Bureau Director-General Shuichi
Ito. Later, met with former LDP Secretary General Nakagawa.

17:03
Met with Minister of Internal Affairs Masuda and Kunihiro Matsuo,
chair of the Verification Committee on Pension Records.

17:28
Attended a get-together of the Female Lawmakers' Policy Research
Council held at LDP headquarters.

18:01
Attended a session of the Council on Economic and Fiscal Policy held
at Kantei.

20:17
Dined with National Defense Academy President Makoto Iokibe and
former Prime Ministerial Advisor Yukio Okamoto at the Japanese
restaurant Yamazato at Hotel Okura.

22:39
Arrived at his private residence in Nozawa.

4) Prime Minister's statement on Antiterrorism Special Measures Law
being no longer in effect (Mainichi)

MAINICHI (Page 5) (Full)
November 2, 2007

The following is the complete text of a statement released by Prime
Minister Yasuo Fukuda accompanying the expiration of the
Antiterrorism Special Measures Law:

Today, the government, accompanying the expiration of the
Antiterrorism Special Measures Law, brought to an end the supplying
operations and other activities of the Maritime Self-Defense Force
in the Indian Ocean. These operations were carried out with the
cooperation and understanding of everyone in this nation, and for
this, I once more express my appreciation. I also would like to
express my appreciation for the efforts of the Self-Defense Forces
personnel who carried out these operations steadily and methodically
in a difficult work environment.

However, the war on terror by the international community is not
over. Close to 3,000 persons were victims of the 9-11 terrorist
attacks, and 24 Japanese were among them. The reality is that this
threat has still not been eliminated. Terrorism is a challenge to

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free and open societies. The war on terror is connected to the
national interests of Japan. That is why our country bore a part of
the effort through supplying activities. These operations must be
quickly restarted.

The core of the various efforts of the international community in
the war on terror is to make sure that Afghanistan does not again
become a hotbed for terrorism. In the area of social and
reconstruction assistance, our country has provided over 140 billion
yen in aid, and has become the number 2 aid donor (for that country)
in the world. In the future, as well, the government will closely
cooperate with the international community and continue to provide
reconstruction assistance.

However, the elimination of terrorism cannot be done by
reconstruction assistance alone. Through mop up operations against
terrorists and measures to maintain public security, such assistance
will bear fruit. Over 40 countries are continuing to carry out
operations in Afghanistan with strong perseverance in order to
recover public security, although there have been noble sacrifices.
The maritime interdiction operation (MIO), an element of such
efforts, deters terrorists from operating in the Indian Ocean.
Supplying operations, which tap the experience and capability of the
Self-Defense Forces, have become fixed as an important base for MIO.
The operations were highly evaluated in United Nations Security
Council Resolution 1776, and strong expectations for the operations
to be continued have come from every country. At the same time, they
contribute to the maritime navigation security of the Indian Ocean,
which is vital to our country.

In order to Japan to carry out its responsibility in solidarity with
the international community to root out terrorism, the supply
operations must be continued. The government will do its utmost to
swiftly enact the new antiterrorism special measures bill so that
the refueling supplying operations can be quickly resumed, with the
understanding and cooperation of everybody in this nation, through
such means as enhancing the transparency of those operations.

5) MSDF withdraws from Indian Ocean, winding up antiterrorism
refueling operation; Special measures law expires; Fukuda-Ozawa
meeting today

YOMIURI (Top play) (Excerpts)
November 2, 2007

Defense Minister Shigeru Ishiba ordered yesterday the Maritime
Self-Defense Force supply ship Tokiwa and the destroyer Kirisame to
wind up their refueling operation in the Indian Ocean and head home
timed with the expiration of the Antiterrorism Special Measures Law.
Aimed at an early resumption of the MSDF operation, Prime Minister
Yasuo Fukuda (concurrently president of the Liberal Democratic
Party), during his party-head talks today with Democratic Party of
Japan (DPJ or Minshuto) President Ichiro Ozawa, is expected to ask
for cooperation for the enactment of new antiterrorism legislation.
The prime minister also intends to call for establishing a framework
for talks between the ruling and opposition camps regarding
important policy. Subjects being considered include the
establishment of a permanent law governing the overseas dispatch of
the SDF and tax and pension affairs.

The two MSDF vessels departed form the Indian Ocean at midnight of
Nov. 1. They will return home in three weeks. At 1:30 p.m. on Nov. 1

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(6:30 p.m., Nov. 1, Japan time), on the Tokiwa, Defense Minister
Ishiba's video message was run in which he said: "Performing duties
in a severe environment is never easy. I know that your duties
entailed difficulties beyond description." The MSDF's refueling
operation of six years that started in December 2001 has now been
put to a halt. The Air Self-Defense Force's airlift mission between
US Yokota Air Base (in Tokyo) and Kadena Air Base (Okinawa) also
ended yesterday.

Prime Minister Fukuda yesterday released a statement saying: "In
order for Japan to fulfill its responsibility for eradicating
terrorism, continuing activities is essential. I will make utmost
efforts for the swift enactment of new antiterrorism legislation."

He is also scheduled to have a second meeting with DPJ head Ozawa
for about two hours from 3:00 p.m. today, following the one on Oct.
30.

6) US, British vessels need to fill gap left by MSDF to maintain
effectiveness of MIO

NIKKEI (Page 2) (Full)
November 2, 2007

The Maritime Self-Defense Force's (MSDF) supply ships provided
refueling service to American and British warships engaged in
maritime intercept operations (MIO) in the Indian Ocean. Japan's
participation in MIO, which aims at preventing terrorists and
weapons from entering or departing Afghanistan, was highly
appreciated, as shown by this comment: "Owing to Japan's refueling
service, it was possible to watch moves in the boundless Indian
Ocean on 24-hour basis." Given this situation, there is concern in
Japan about the negative impact of the MSDF's withdrawal from the
Indian Ocean.

In a meeting of the House of Representatives' special committee on
antiterrorism and Iraq support yesterday, Foreign Minister Koumura
said: "The efficiency of MIO might be undermined. In particular,
other countries will have to provide the operation done by Japan in
order to enable Pakistan to continue its current mission."

Defense Minister Shigeru Ishiba said: "The suspension of Japan's
operation will not lead to diminishing the deterrence capability of
MIO." But this view is premised on a case in which the US and other
countries fill the gap left by the MSDF's withdrawal. Some persons
suggest that: (1) participating countries should increase the number
of their warships; (2) The American and British militaries should
provide other countries with replenishment tankers; and (3) the
strategic zone should be narrowed.

7) MSDF-refueled vessel allowed to concurrently serve in Iraq
operation, says Machimura

YOMIURI (Page 4) (Full)
November 2, 2007

Chief Cabinet Secretary Nobutaka Machimura in a meeting yesterday of
the House of Representatives Special Committee on Prevention of
Terrorism indicated that there would be no problem for a foreign
vessel refueled by the Maritime Self-Defense Force to temporarily
engage in operations in Iraq when it is on both the maritime
interdiction operation (MIO) and the Iraq operation. Social

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Democratic Party lawmaker Kiyomi Tsujimoto asked, "Is an
MSDF-refueled vessel allowed to engage in MIO after going to Iraq?"
In response, Machimura said, "Such is allowed as long as (Japanese
oil) is used for the MIO."

8) MSDF pullout: Views from opinion leaders

NIKKEI (Page 3) (Full)
November 2, 2007

Okamoto: Consider joining ISAF in Afghanistan

Yukio Okamoto, formerly a special advisor to the prime minister,
commented: "The Maritime Self-Defense Force's withdrawal means Japan
has dropped out from the international team fighting terrorists.
Since the Gulf War, Japan has made international contributions.
However, Japan will now have to start all over again from scratch.
Japan should continue to explore ways to join the activities in
Afghanistan. That's important for Japan in its ties with the
international community. The government should do its utmost efforts
to continue refueling activities. However, if there's no way in the
end, then the prime minister-in response to Democratic Party of
Japan (Minshuto) President Ichiro Ozawa's proposal-should also think
about participating in the form of sending personnel to ISAF
(International Security Assistance Force) headquarters or
cooperating in the area of transportation."

Soeya: Discuss Japan's int'l role

Yoshihide Soeya, a professor at Keio University, commented: "The
MSDF's refueling mission in the Indian Ocean has allowed Japan to
play a role, making an international contribution, even though there
are constitutional and other constraints. In other words, Japan
cannot do nothing much to begin with. Under such a condition, Japan
has conducted refueling activities there. Even after Japan has
called off its refueling activities, no harm will come to its
foreign policy, including Japan-US relations. On this occasion, the
ruling and opposition parties should hold discussions in an explicit
way about how Japan should contribute to international security.
That's an important challenge. That includes discussing the idea of
creating a permanent law that allows Japan to send the Self-Defense
Forces overseas whenever it is necessary to do so."

9) Japan concerned about possible decline in international
confidence in wake of ending six years of refueling services

TOKYO SHIMBUN (Page 2) (Full)
November 2, 2007

Yuji Nishikawa, Tetsuya Furuta

With the expiration yesterday of the Antiterrorism Special Measures
Law, Japan halted its Maritime Self-Defense Force's (MSDF) refueling
mission in the Indian Ocean. The refueling operations started in
2001, and over the six years since, Japan refueled other countries'
vessels a total of 794 times. The Tokyo Shimbun probed into the role
Japan had played through the mission in terms of preventing the
proliferation of terrorism and in view of international
contributions, and also into what impact the suspension of the
mission would have.

Aiming to continue the refueling operations, the government

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submitted new antiterrorism special measures legislation to the
current session of the Diet. Debate on the new bill is held every
day at the Lower House Special Committee on Prevention of
Terrorism.

In the debate, the opposition bloc is repeatedly pursuing the
"results" of the past operations. The opposition bloc's thinking is
that the results of the past refueling services for other countries'
vessels participating in the maritime interdiction operations (MIO)
are the conditions for Japan to continue the mission.

Foreign Minister Masahiko Koumura emphasized an aspect of deterrence
against terrorism in answering in a session of the Lower House
special committee this way: "The major result is that (the mission)
has prevented the Indian Ocean from turning into a sea of
terrorists."

The government has publicized the number of the MSDF's refueling of
other countries' vessels and the amount of oil provided by the MSDF
to those vessels, but when it comes to the results in terms of
preventing terrorism, what the government has disclosed to date have
been limited to a dozen specific cases shown by the United States
and other countries participating in MIO and the total amount of
narcotics and weapons seized. The government has not made clear any
data indicating a total number of detained people affiliated with
terrorist organizations.

In addition, the amount of oil provided by the MSDF to other
countries' vessels sharply dropped to 14,000 gallons this year from
a peak of some 175,000 gallons in 2002. As far as this figure is
concerned, the need for refueling seems to be declining.

Defense Minister Shigeru Ishiba explained in this regard: "It's
difficult to explain deterrence by using numbers." Koumura insisted,
"(The halt to the refueling operations) would undermine the
efficiency of MIO." But it is still unclear what impact of the
suspension of the refueling mission will have on the war on
terrorism in specific terms.

Meanwhile, Koumura stressed the result of the refueling mission on
the diplomatic front, noting, "The mission has been highly
appreciated by other countries. It is a tangible human
contribution."

The government has noted that the Japan-US alliance will not cool
down immediately by the suspension of the refueling mission with a
senior Foreign Ministry official saying, "The US has understood the
political situation in Japan." The government wants to obtain other
countries' understanding by indicating it is making efforts to
resume the mission as quickly as possible.

However, the suspension of the mission may be protracted as there is
no prospect at present for the new legislation to be enacted into
law.

At a session yesterday of the Lower House special committee, Koumura
emphasized the need to enact the new legislation swiftly by saying:
"We must not bring international confidence in Japan to nothing. If
we did so, Japan would be taken by other countries as a country that
is unwilling to fight against terrorism."

10) LDP hopes for resumption of MSDF mission, while DPJ afraid of

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criticism as Fukuda-Ozawa talks resume

MAINICHI (Page 5) (Full)
November 2, 2007

The Maritime Self-Defense Force's refueling mission in the Indian
Ocean, based on the Antiterrorism Measures Law, was called off Nov.
1 due to the expiration of the law. In connection with the MSDF
pullout, the ruling parties yesterday expressed their hopes for an
early resumption of the refueling operation, while the main
opposition Democratic Party of Japan (DPJ or Minshuto) emphasized
that the government and ruling coalition were to blame for the law's
expiration. The reality is however that the two parties are quietly
watching from afar the result of the second meeting between Prime
Minister Yasuo Fukuda and DPJ President Ichiro Ozawa scheduled for
today.

In a meeting yesterday of his faction, Taku Yamasaki, former LDP
vice president, revealed his view that the ruling coalition would be
able to put a new antiterrorism special measures bill to a second
vote at the House of Representatives (in a bid to enact it) after
the DPJ voted down the new legislation at the House of Councillors.
He said: "I think (the new antiterrorism bill) would be passed by a
two-thirds lower chamber overriding vote." His remark is the
expression of his hope that the DPJ would tacitly approve of taking
a second vote in the Lower House in the wake of the first
Fukuda-Ozawa meeting. He did not give any reason for his
expectations. LDP Secretary General Bunmei Ibuki again sought to
constrain the DPJ in a meeting yesterday at party headquarters.

The largest opposition party has yet to reach a consensus on how to
respond to the matter. Deputy President Naoto Kan stressed in a
press conference yesterday: "I want you to understand that the
government and ruling camp did nothing (to pass the bill earlier)."

The DPJ was concerned that the public might criticize the party over
the MSDF pullout after the media report the scenes MSDF ships are
leaving from the Indian Ocean. However, the standoff mood between
the two parties has been eased after the Fukuda-Ozawa meeting on
Oct. 30. A mid-level DPJ member said: "The best strategy is to run
away." The main opposition party is trying to make its
responsibility vague for its opposition that led to the MSDF pullout
by taking advantage of the government and ruling coalition, which
have not taken a resolute stance toward the enactment of the new
antiterrorism bill.

11) Government to strengthen assistance for Afghanistan

SANKEI (Page 5) (Full)
November 2, 2007

The government decided yesterday to extend new economic assistance
to Afghanistan and Pakistan as part of its international
contribution in support of the war on terror. It plans to
incorporate the amount of aid in a supplementary budget for fiscal
2007. With the expiration of the Antiterrorism Special Measures Law,
Maritime Self-Defense Force (MSDF) ships today began pulling out of
the Indian Ocean. Japan has now suspended its personnel contribution
to the campaign to eliminate terrorist forces in and around
Afghanistan. The government has decided, therefore, to increase
economic aid to the two countries.


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12) Japan to include budget for additional assistance to Afghanistan
in supplementary budget bill

TOKYO SHIMBUN (Page 2) (Full)
November 2, 2007

The government's Council of Overseas Economic Cooperation held a
meeting yesterday at the Prime Minister's Official Residence
(Kantei). Joining the meeting were relevant cabinet members,
including Chief Cabinet Secretary Nobutaka Machimura and Foreign
Minister Masahiko Koumura. In the session, they decided to include a
set of additional humanitarian and reconstruction measures for
Afghanistan in a 2007 supplementary budget bill.

This decision came in response to the halt to the Maritime
Self-Defense Force's (MSDF) refueling operations in the Indian
Ocean. Areas to be covered by the set of those measures include
vocational training for Afghan refugees who returned home from Iran
and Pakistan, improvement in public order, and education. Specifics
will be further discussed in the days ahead.

So far the Japanese government has implemented a set of assistance
measures for Afghanistan worth 140 billion yen. The government has
already decided to offer additional assistance worth 24 billion yen.
It intends to secure a portion of that amount in a 2007
supplementary budget bill and to get the bill adopted in the
ordinary session of the Diet slated for next year.

13) DPJ calls for summoning Yamada Corp. president as sworn witness

NIKKEI (Page 2) (Full)
November 2, 2007/11/02

In a meeting yesterday of the House of Councillors' foreign and
defense affairs committees, the Democratic Party of Japan (DPJ)
renewed its call for summoning Yamada Corp. President Yoshihiko
Yonezu to the Diet as a sworn witness over the CX engine scandal
involving former Vice Defense Minister Takemasa Moriya. Since the
ruling camp withheld a reply, this issue will be discussed again in
a meeting today. To realize a summons to a witness, the rule of
unanimity is adopted. The DPJ, however, aims to summon the president
to the current Diet session, so the main opposition party might
adopt the principle of majority rule in the meeting today.

14) Former Yamada Yoko executive director treated former Upper House
member, then ASDF lieutenant general, with more than 10 tennis
tours

SANKEI (Top Play)
November 2, 2007

In connection with the issue of Motonobu Miyazaki (69), former
executive director of Yamada Yoko, a trading house specializing in
defense procurement, having treated former Administrative Vice
Defense Minister Takemasa Moriya (63) with free rounds of golf, it
was also found yesterday through the company's in-house
investigation that Yamada Yoko treated former Upper House member
Hideaki Tamura (75), who was then commandant of the Air Staff
College, with free tennis tours at least more than 10 times between
1986-1987. A company employee booked hotels with tennis courts for
Tamura at the order of Miyazaki and the company paid the full
amounts of his hotel bills. Regarding this, Tamura refused to make a

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reply, noting through his secretary that he cannot respond to any
requests for an interview.

According to more than one source connected with Yamada Yoko, Tamura
went on an overnight tennis tour about once or twice a month for
about two years starting around 1986. He stayed at Sengokubara
Prince Hotel (management right transferred in 2004) in Hakone Town,
Kanagawa Prefecture, which has tennis courts. He mostly stayed there
overnight on weekends.

An employee in charge booked the hotel and a tennis court when
Miyazaki gave him Tamura's schedule.

Yamada Yoko paid a bill including hotel, meal and tennis court fees
for two persons, each time it was sent to it from the hotel. Some
billing statements allegedly included amounts of the purchases of
tennis goods. The amount the company paid for one tour way exceeded
10,000 yen.

Employees of Yamada Yoko, including Miyazaki, never joined Tamura's
tennis tours.

Tamura retired from the college in January 1989. He ran for the
Upper House election in July the same year and was elected for the
first time. Yamada Yoko stopped paying bills for Tamura's tennis
tours around 1987 in the run-up to Tamura's going into politics.

15) GE suspends agent contract with Nihon Mirise Corp.

NIKKEI (Page 43) (Full)
November 2, 2007

A former managing director of Yamada Yoko Corporation, a
defense-related trading company, used to play golf with former
Administrative Vice Defense Minister Takemasa Moriya, 63, when
Moriya was in office at the Defense Ministry. In connection with
this problem, General Electric Co. (GE), a US corporation, revealed
yesterday that it has suspended all of its business with Yamada
Corp. and Nihon Mirise Corporation (NMC), which was established by
the former Yamada Corp. executive. GE has also suspended its
contract with NMC as an agent on the engine for the Air Self-Defense
Force's follow-on cargo aircraft (CX).

GE notified Yamada Corp. and NMC on Oct. 31 of its decision to
suspend business with the two companies. GE says it has yet to
decide on when to resume business with the two companies.

Moriya was summoned to the Diet on Oct. 29 as a sworn witness. In
his testimony there, Moriya stated that he used to play golf with
Motonobu Miyazaki, 69, formerly a managing director at Yamada Corp.,
and used to be dined and wined by the former executive even after
April 2000 when the Defense Ministry renewed its code of ethics for
personnel in the Self-Defense Forces to prohibit them from receiving
any kind of services from contractors. The former executive is now
certain to have been involved in a violation of the SDF ethical
code. GE therefore decided to withhold itself from doing business
with Yamada Corp. and NMC, which is headed by the former executive.

16) Second Fukuda-Ozawa talks today; Ozawa denies LDP-DPJ grand
coalition; Some members in both parties concerned about
rapprochement


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MAINICHI (Page 2) (Excerpts)
November 2, 2007

The second meeting between Prime Minister Yasuo Fukuda, president of
the ruling Liberal Democratic Party (LDP) and Ichiro Ozawa,
president of the largest opposition Democratic Party of Japan (DPJ
or Minshuto) will be held this afternoon. However, some members in
the ruling and opposition camps are wary about rapprochement between
the two party leaders. Attention is now focused on whether Ozawa
will lean toward a dialogue-oriented policy or whether the two
leaders will discuss a Diet session extension as the current session
is set to expire on Nov. 10.

Since the two held their first meeting, calls for dialogue have been
raised in the DPJ. In the city of Utsunomiya yesterday, Ozawa denied
the possibility of forming a grand coalition between the LDP and
DPJ, saying, "I have no intention." He stressed that his target was
to assume the reins of government in the next House of
Representatives election. "Since I received a strong request (from
the prime minister for the meeting), I will meet him. We will not
hold regular meetings. If nothing is produced in the meeting, there
will be no meeting." He tamped down the cooperative mood.

17) Prime minister, Ozawa positive about holding talks on permanent
law on dispatch of SDF troops abroad: They meet again today

MAINICHI (Top Play) (Excerpts)
November 2, 2007

Prime Minister Yasuo Fukuda yesterday took a positive stance toward
the possibility of establishing a permanent law, instead of a law
with a limited period of validity like the Anti-terrorism Special
Measures Law, which expired on Nov. 1. He said, "If the Democratic
Party of Japan (DPJ or Minshuto) agrees, we will consult with the
New Komeito and decide whether to submit (such a bill) to the Diet."
DPJ President Ichiro Ozawa also told reporters the same day, "If the
government and the DPJ agree with our view, based on appropriate
ideals and principles, we would be able to hold talks anytime."
There has now appeared the possibility of the enactment of permanent
legislation allowing Self-Defense Force (SDF) personnel overseas
paving the way for the LDP and the DPJ to find common ground. The
second round of Fukuda-Ozawa talks will be noted with attention.

Responding at the Kantei to questions from reporters on the
envisaged permanent law, Fukuda explained, "The idea has been around
for some time that it would be better to pass a law that allows SDF
personnel to engage in operations under any circumstances, instead
of creating a law that can only be applied when it becomes necessary
for Japan to extend international cooperation." He added, "If the
DPJ agrees, we will consult with it on the matter."

In the meantime, Ozawa held a press conference in Utsunomiya in
which he revealed his readiness to respond to talks if the aim was
to lay down general principles for the overseas dispatch of SDF
personnel under a permanent law. He said, "My long-cherished
position is to create a basic law for international contributions
and to help secure and maintain peace. I am against the present
dispatch of SDF troops, because the government and the ruling
parties have no principles for doing that."

18) Abduction league delegation to visit US


TOKYO 00005082 012 OF 013


YOMIURI (Page 4) (Full)
November 2, 2007

A delegation of the parliamentary league on the abduction issue,
chaired by former Economy, Trade, and Industry Minister Takeo
Hiranuma, will visit the United States from Nov. 14. In the planned
talks with persons connected with the US Congress, the Hiranuma-led
group of eight lawmakers from the Liberal Democratic Party,
Democratic Party of Japan, and New Komeito plans to ask for
cooperation for a settlement of the abduction issue and other
matters.

19) Policy switch to attach importance to consumers: Prime minister
orders reviews of all policies

ASAHI (Page 4) (Full)
November 2, 2007

Prime Minister Fukuda yesterday called in State Minister for
People's Life Kishida to the Prime Minister's Official Residence
(Kantei) and ordered him to review all policies, laws and ordinances
from a perspective of attaching importance to consumers. Following a
series of food-labeling scams, false earthquake-resistance
calculations and the drug-induced hepatitis case, he wants to switch
his administration's basic policy from attaching importance to
producers to laying emphasis on consumers. However, since such a
policy shift requires a change in the awareness of government
agencies, whether the government can come up with effective measures
will depend on the prime minister's leadership.

The prime minister ordered Kishida to check the policies, laws and
ordinances of all government agencies from the perspective of
eating, working, making things, protecting, and living. Kishida
will sort out measures adopted by all government agencies and listen
to views of experts, and then report the results to the prime
minister. Regarding proposals that will require legal amendments,
bills amending relevant laws will be submitted to the regular
session of the Diet next year.

Major items up for revisions include appropriate labeling of the
quality of commercial goods, disclosure of information on
pharmaceuticals, monitoring imported foods, prevention of illegal
business practices targeting elderly people, employment measures
mainly for so-called freeters (job-hopping part-time workers) and
public security measures for local communities.

The prime minister in his policy speech declared that the time has
come when importance must be attached to the safety and peace of
mind of the public instead of the thinking that emphasis must be
attached to producers, based on the reflection that the Liberal
Democratic Party (LDP) was harshly defeated by the Democratic Party
of Japan (DPJ), which advocated highest priority to people's lives.
He has repeatedly held study meetings with his aides with the
determination that he would fundamentally change the stance of
government offices, which consider policies for the convenience of
producers, as an aide to the prime minister put it.

However, since it is a grand plan to take a second look at all
policies from the standpoint of consumers, some are concerned that
the themes are so wide-ranging it is questionable whether
bureaucrats affected by the thinking of producers can come up with
good proposals, as a senior Cabinet Office official put it. Some

TOKYO 00005082 013 OF 013


also take the view that the government agencies will not move unless
concrete themes are set and they are pressed to change their
concepts, as a senior government official said.

SCHIEFFER

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