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Cablegate: Japanese Morning Press Highlights 01/22/08

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UNCLAS SECTION 01 OF 11 TOKYO 000152

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 01/22/08


Index:

Opinion polls:
1) Jiji poll: Fukuda Cabinet support rate plummets 5.6 points to 34
PERCENT ; nonsupport rises to 39.8 PERCENT (Tokyo Shimbun)
2) Fukuda non-support rate at 45 PERCENT in Mainichi poll, far
outpacing support rate of 33 PERCENT ; Majority frown on Lower House
overriding of bills rejected by Upper House (Mainichi)
3) Mainichi poll finds 32 PERCENT favoring Diet dissolution after
budget compiled in spring, while 28 PERCENT would put it off until
after the G8 Summit (Mainichi)
4) Jiji poll: 38 PERCENT approve, 34 PERCENT disapprove revote on
refueling mission bill (Tokyo Shimbun)

Korean Peninsula affairs:
5) Ambassador Schieffer in Los Angeles speech worries that Japan,
South Korea might go nuclear if North Korea is allowed to possess
nuclear arms (Mainichi)
6) South Korean President-elect Lee plans to make Japan his first
overseas visit after inauguration (Nikkei)

Defense and security affairs;
7) Japan to implement 180 billion yen package of yen loan projects
in Iraq for needed infrastructure repairs (Asahi)
8) Prime Minister Fukuda skips ceremony for departure of MSDF ships
hearing for Indian Ocean refueling mission (Tokyo Shimbun)

9) Citing tactical reasons, U.S. refuses to sign note with Japan
ensuring that MSDF fuel provided in Indian would be used only for
OEF/MIO (Tokyo Shimbun)
10) Futenma relocation site's environmental assessment likely to
start next month (Asahi)
11) Moriya admits to committing perjury in Diet testimony and will
be so charged (Tokyo Shimbun)

Africa aid:
12) Government to provide Africa with PKO training (Nikkei)
13) Foreign Ministry blue-ribbon panel calls for expansion of
assistance to Africa (Sankei)

14) On again off again trip to Davos Conference by DPJ head Ozawa is
off again (Yomiuri)

Economy:
15) In Diet speech, Economic and Fiscal Policy Minister Ota sounds
alarm, warning that Japan is no longer a first class economy
(Mainichi)
16) Public split on whether the economy is in sound shape or now in
Cabinet Agency poll (Mainichi)
17) Russian banks set to advance into Japan next year (Mainichi)

18) Japan ranked worst among the advanced industrialized countries
in greenhouse-gas containment, largely because of reliance still on
coal-use generators (Tokyo Shimbun)

Articles:

1) Poll: Cabinet support dips to 34 PERCENT

TOKYO SHIMBUN (Page 2) (Abridged)
January 19, 2008


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The approval rating for Prime Minister Yasuo Fukuda and his cabinet
was 34.5 PERCENT , according to a public opinion survey conducted
for the month by Jiji Press on Jan. 11-14. The figure showed a
substantial drop of 5.6 percentage points from last month. The
disapproval rating for the Fukuda cabinet was 39.8 PERCENT , up 5.6
points. The nonsupport rate topped the support rate for the first
time since the Fukuda cabinet came into office in September last
year.

In the breakdown of public support for political parties, the ruling
Liberal Democratic Party stood at 22.9 PERCENT , up 0.7 points from
last month. The leading opposition Democratic Party of Japan
(Minshuto) was at 15.4 PERCENT , down 0.5 points. As seen from these
figures, the DPJ has yet to become a party that can take the place
of the LDP-led government. The proportion of those with no
particular party affiliation was 53.8 PERCENT , down 0.4 points.

The survey was conducted across the nation with a total of 2,000
persons chosen from among men and women aged 20 and over. The
retrieval rate was 67.2 PERCENT .

2) Poll: 51 PERCENT opposed to future overriding; Cabinet support
levels off at 33 PERCENT

MAINICHI (Top play) (Abridged)
January 21, 2008

The Mainichi Shimbun conducted a telephone-based nationwide public
opinion survey on Jan. 19-20. The Diet has now enacted a new
antiterrorism law. The ruling parties took a second vote in the
House of Representatives on the law after it was rejected in the
opposition-dominated House of Councillors. In the survey,
respondents were asked if they thought it was appropriate. To this
question, public opinion was split, with 46 PERCENT answering "yes"
and 44 PERCENT saying "no." If the upper chamber votes down other
bills in the future, the lower chamber could revote on these
rejected bills to override the upper chamber's decisions. Asked
about this future overriding, negative answers accounted for 51
PERCENT , with affirmative answers at 38 PERCENT . As seen from
these figures, the public was severe about the ruling coalition's
option of overriding the upper chamber's decisions in the future.
The approval rating for the Fukuda cabinet was 33 PERCENT , leveling
off from the last survey taken in December last year.

On Jan. 18, the Diet called an ordinary session. The ruling and
opposition benches are expected to focus on a special taxation
measures law in their Diet debate over whether to keep imposing a
provisional tax on gasoline. The ruling coalition is ready to take a
second vote on the law in the House of Representatives if it is
voted down in the House of Councillors. However, the governing
parties will likely need to obtain public understanding.

The government will now resume the Maritime Self-Defense Force's
refueling activities in the Indian Ocean under the now-enacted
antiterror law. In the survey, respondents were asked if they
supported this government action. In response, 47 PERCENT answered
"yes," with 42 PERCENT said "no."

3) Poll: 32 PERCENT want Diet dissolution after budget passage, 28
PERCENT prefer "after G-8 summit"

MAINICHI (Page 2) (Abridged)

TOKYO 00000152 003 OF 011


January 22, 2008

The Mainichi Shimbun conducted a telephone-based nationwide public
opinion survey on Jan. 19-20, in which respondents were asked when
they thought the House of Representatives should be dissolved for a
general election. The most common answer, accounting for 32 PERCENT
, was that the House of Representatives should be dissolved after
the budget for next fiscal year clears the Diet. Among other
answers, 28 PERCENT said "after this July's G-8 summit in
Hokkaido," with 13 PERCENT saying "the House of Representatives
should be dissolved immediately" and 20 PERCENT saying "there's no
need to dissolve it."

Respondents were also asked which political party between the ruling
Liberal Democratic Party and the leading opposition Democratic Party
(Minshuto) they would like to see win in the next election for the
House of Representatives. To this question, the DPJ scored 44
PERCENT , with the LDP at 35 PERCENT . Other political parties
accounted for 12 PERCENT . This question was asked in the past six
surveys from August last year, and the DPJ has been above the LDP.

4) Poll: 38 PERCENT for new refueling law's enactment in 2nd vote,
34 PERCENT against

TOKYO SHIMBUM (Page 2) (Full)
January 20, 2008

The Diet enacted a new antiterrorism special measures law in a
recent extraordinary session, with the ruling parties taking a
second vote on the law in the House of Representatives after it was
voted down in the opposition-controlled House of Councillors.
However, public opinion was split over this way of enacting a law,
according to a Jiji Press public opinion survey released yesterday.
In the survey, respondents were asked if they supported the ruling
coalition's overriding in the lower chamber of the upper chamber's
decision. In response, 38.9 PERCENT answered "yes," with 34.1
PERCENT saying "no."

The survey was conducted across the nation on Jan. 11-14 with a
total of 2,000 persons chosen from among men and women aged 20 and
over. The retrieval rate was 67.2 PERCENT .

"Yes" accounted for 60 PERCENT among those who support the ruling
Liberal Democratic Party, and 50 PERCENT among those who support
New Komeito, the LDP's coalition partner. Among those who support
the leading opposition Democratic Party of Japan (Minshuto),
affirmative answers accounted for a little less than 30 PERCENT ,
with negative answers nearing 60 PERCENT . Among those who support
the Japanese Communist Party and the Social Democratic Party
(Shaminto), 90 PERCENT answered "no."

Respondents were also asked about the advisability of taking a
second vote on other bills in the House of Representatives to
override the House of Councillors' rejection of these bills. To this
question, 18.1 PERCENT answered that there is no problem because it
is constitutional, with 11.7 PERCENT saying they are opposed to
overriding the upper chamber's decision in any case. Those accepting
it with conditions accounted for more than 50 PERCENT . Among them,
24.4 PERCENT were affirmative for only important bills, with 31.1
PERCENT affirmative for some cases.

4) A nuclear-armed North Korea could pressure Japan and South Korea

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to go nuclear, says Ambassador Schieffer in speech

MAINICHI (Page 3) (Full)
January 20, 2008

Jiji, Los Angeles

U.S. Ambassador to Japan Thomas Schieffer gave a speech at a Los
Angeles hotel on Jan. 18. Regarding security in Northeast Asia in a
question-and-answer session, Schieffer indicated that the
development of nuclear weapons by North Korea must be blocked
through the six-party talks, saying, "The possession of nuclear
weapons by North Korea could put pressure on Japan and South Korea
to arm themselves with nuclear weapons."

He also indicated that there is concern in Japan that the United
States is putting greater importance on China as its partner than on
Japan. The Ambassador said: "Should Japan lose its trust in the
U.S., there is the possibility that it may go nuclear. If that were
to happen, the situation (in Northeast Asia) would become much more
dangerous. The good relationship between the United States and Japan
is not something that can be replaced by U.S.-China relations."

5) Coordination underway for South Korean president-elect's visit to
Japan immediately before trip to U.S. in March or April

NIKKEI (Page 2) (Full)
January 22, 2008

Mari Yamaguchi, Seoul

South Korean President-elect Lee Myung Bak has decided to choose
Japan as the country for his first overseas trip after he assumes
office. His schedule for a visit to Tokyo is now under coordination,
it was revealed yesterday by several sources familiar with
Japan-South Korea relations. According to aides to the
president-elect, it is most likely that Lee will stop in Tokyo
before he visits the United States in March or April, a plan that is
now under coordination. He appears to be looking to repair relations
with Tokyo and Washington, which have been cool because of the
government of President Roh Moo Hyun.

In a telephone conference with Prime Minister Yasuo Fukuda in late
last December, Lee proposed resuming annual reciprocal visits
between the top leaders of the two countries. Fukuda plans to attend
the presidential inauguration on Feb. 25 and to hold a summit with
Lee. Fukuda's planed visit to Seoul and Lee's trip to Tokyo will
become the first reciprocal visits between them.

6) Government will soon implement 180 billion yen in yen loans to
Iraq, centered on such infrastructure projects as repairing power
generators

ASAHI (Page 1) (Abridged)
Eve., January 19, 2008

As assistance for the reconstruction of Iraq, the government has
decided to implement soon a package of yen loans totaling 182.7
billion yen that will be centered on building infrastructure, such
as a thermal power generator and repairing oil refining facilities.
This would be the first large-scale yen loan implementation toward
that country since the Iraq war. Based on the amount of assistance

TOKYO 00000152 005 OF 011


from specific donor countries, it would be the largest scale next to
that from the United States.

With the country having stabilized and public security better than
before, owing to such factors as the surge in U.S. troops, the
intention of the Japanese government is to link the projects to
improved civil life.

The project to be implemented are part of a total package of
approximately $5 billion (approximately 537 billion yen) pledged by
the Japanese government in 2003. Although the government exchanged
notes with the Iraq government in 2007 for a total of 10 projects,
since the administration there was continued to experience
instability due to such factors as clashes among religious sects,
approval by the Iraqi side was delayed. Contracts will now be signed
as early as Jan. 25 between JBIC, as the main implementing body, and
the Iraqi government.

According to an informed source, eight projects will be targeted for
loans this time and include the country's largest power generating
facility in the suburbs of Baghdad, repair assistance for the
Al-Mussaib Thermal Power Plant Rehabilitation Project, repair of the
tanker mooring docks off Basra, and construction of bridges and
roads in the Samawah area where the Self-Defense Forces were
previously stationed. At the request of the Iraqi government, the
decision to go forward was made, with consideration given to such
factors as the public security situation. The work will be entrusted
to domestic Iraqi firms, as well as companies in countries
neighboring Iraq, such as Turkey.

To continue the implementation of the yen-loan package, the
remaining two projects include rehabilitation of a thermal power
station in the northern part which is under the Kurds. Contracts are
expected to be signed in several months. The total amount of yen
loans implemented this year is expected to reach approximately 240
billion yen (of approximately $2.2 billion).

7) Prime minister and other cabinet ministers may not be able to
attend MSDF vessel send-off ceremonies due to Lower House budget
committee sessions

TOKYO SHIMBUN (Page 2) (Excerpts)
January 22, 2008

Prime Minister Yasuo Fukuda, Defense Minister Shigeru Ishiba and
other relevant members might not able to attend the Jan. 24 and 25
send-off ceremonies for the Maritime Self-Defense Force vessels that
will go to the Indian Ocean to resume the refueling operation under
the new antiterrorism special measures law. The reason is that the
House of Representatives Budget Committee, the main arena for debate
between the ruling and opposition camps, is likely to meet starting
on Jan. 24.

In many cases, the prime minister and relevant cabinet ministers
attend ceremonies to send off MSDF personnel on overseas missions in
order to encourage them and demonstrate the government's resolve.

One MSDF vessel is scheduled to depart from the Yokosuka base in
Kanagawa Prefecture on the morning of Jan. 24 and another one from
the Sasebo base in Nagasaki Prefecture on the morning of Jan. 25.
But the Lower House Budget Committee is expected to meet on both
days. Although the opposition camp has yet to call for the

TOKYO 00000152 006 OF 011


attendance of any specific cabinet ministers, chances are that all
the cabinet ministers, including the prime minister, will have to be
present at the budget sessions. Given the situation, chances are
slim for the prime minister and other relevant cabinet minister to
visit the two bases to attend the send-off ceremonies.

Although the option of holding the send-off ceremonies on Jan. 26
and 27, when there will be no committee meetings, surfaced, the
government needed to brush it aside in order to keep its pledge of
resuming the refueling operation as soon as possible.

9) U.S. refuses Japan's request for mentioning in exchange notes the
limited use of MSDF-supplied fuel

TOKYO SHIMBUN (Page 1) (Full)
January 20, 2008

The United States government will not mention in the exchange notes
the tracking of the use of all fuel provided by the Maritime
Self-Defense Force (MSDF) in the Indian Ocean, in declining Japan's
request. A US government official gave this explanation: "The
verification process will hinder the U.S. strategic operations, and
an additional burden will be imposed on those engaged in the
operations. We cannot accept Japan's request at all." This
information was revealed by several sources familiar with Japan-U.S.
relations.

The U.S. agreed Japan's plan to specify the MSDF mission in the new
antiterrorism law as "supplying fuel and water only to naval vessels
engaged in maritime intercept operations against terrorism." Some
might criticize that Washington's refusal will make "the limited use
of supplied fuel" merely nominal.

The MSDF is expected to resume its refueling operation in
mid-February based on the new antiterrorism special measures law.
The governments of Japan and the U.S. are preparing to finalize
exchange notes by the end of this month.

According to informed sources, Japanese and U.S. authorities for
foreign and defense affairs started coordination last October, when
Japan submitted the new antiterrorism bill to the Diet. Keeping in
mind the allegation of diversion of MSDF-supplied oil to the Iraq
war, Japan requested that the new law specify the purpose of the
mission. The U.S. initially insisted that Japan should use the same
wording as that in the notes exchanged on the basis of the former
antiterrorism law, which included no mention of a ban on the use of
supplied fuel for other than the specified purpose.

To enable the use of all fuel to be tracked, Japan asked the U.S.
afterward to insert this expression in the exchange notes: "The
governments of Japan and the U.S. will carry out necessary
coordination in order to ensure that the operations will meet the
purpose of the new law." But the U.S. turned it down, reasoning that
since the tanks of war ships will never empty, it will be impossible
to prove that the amount of supplied oil and the amount of consumed
oil are completely the same. The U.S. side warned that if Japan
makes no concession, there may be a case in which vessels will not
receive MSDF refueling service.

10) Futenma environmental assessment may start next month; Nakaima
willing to give nod with changes to outline


TOKYO 00000152 007 OF 011


ASAHI (Page 35) (Abridged slightly)
January 22, 2008

Okinawa Governor Hirokazu Nakaima revealed his plan yesterday to
convey to the Ministry of Defense the need to rewrite the part
pertaining to the planned landfill project in the MOD's outline
specifying an environmental impact assessment for the planned
relocation of U.S. Futenma Air Station to Nago. The governor also
indicated that he would endorse the assessment once the outline is
rewritten. With the government expected to comply with Nakaima's
request for rewriting the outline by submitting additional data, the
assessment is likely to start in February, as planned by MOD.

Even so, there are no prospects for the government to reach an
agreement with Okinawa and Nago regarding their request to move the
planned construction location further offshore. The government is
likely to carry out the assessment while keeping the greatest
contentious point on the backburner.

Nakaima urged the government to clarify the shape of the envisaged
reclaimed land and the construction plan, contending that what is
stated in the outline is insufficient to make an appropriate
decision. He also requested the government make a final decision
after holding talks with the prefectural government on the contents
of the project and the survey methods ahead of implementing the
assessment.

Nakaima, however, is not demanding that the government redo the
assessment process, such as the official announcement and
inspection, all over again from the start. Nakaima indicated to the
press that he would give a nod to the planned assessment once
Okinawa's requests are answered, saying: "The government might
finish rewriting the outline in time to start the assessment in
February."

The government, too, intends to comply with Okinawa's request, with
a senior official saying, "The governor's view must be respected. If
the prefectural side needs additional information, we will deal with
the speedily." The government intends to confirm the implementation
of the assessment with the Okinawa prefectural government and
affected municipalities at the Futenma relocation consultative
meeting, to be held in early February.

MOD has also softened its stance, with its official saying, "We will
deal with Okinawa more politely, proving it with additional
information."

11) Former Vice Defense Minister Moriya admits to having given false
Diet testimony; Prosecutors to bring charges again

TOKYO SHIMBUN (Page 20) (Full)
January 22, 2008

It was learned that former Administrative Vice Defense Minister
Takemasa Moriya, 63, now under indictment, made a statement to the
special investigation squad of the Tokyo Public Prosecutors Office
admitting to committing perjury in testimony in the two chambers of
the Diet. The special investigative task force plans to bring on
Jan. 22 another accusation against Moriya for violation of the Diet
Testimony Law, as well as for having received the special treatment
of golf outings from Motonobu Miyazaki, former defense equipment
trading house Yamada Corp. executive, 69, how has been under arrest.

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Moriya stated in a House of Representatives Antiterrorism Special
Committee session last November that he had paid 10,000 yen for a
green fee every time when he played golf with Miyazaki, but he told
the prosecutors that he had not paid the money. He also testified in
a session in November of the House of Councillors Committee on
Foreign Affairs and Defense: "I have paid from my own purse all the
expenditures for my daughter's study abroad."

However, Moriya's daughter used about 1.45 million yen sent from
Miyazaki for her living costs (in the United States). The bribery
amount Moriya received from Miyazaki is expected to total more than
10 million yen.

12) Assistance for training PKO personnel: Government to first
provide funds to Africa

NIKKEI (Page 2) (Full)
January 19, 2008

The government will launch assistance to various foreign countries
in their efforts to train peacekeeping operations (PKO) personnel.
It will help them train and educate PKO personnel, by providing
funds to PKO training centers in Africa and Asia through an
international agency. This is part of efforts to make Japan a peace
cooperation state as Prime Minister Fukuda advocated in his policy
speech. The government thus wants to offer indirect assistance to
countries, to which Japan cannot dispatch Self-Defense Forces
personnel due to the restriction under the five PKO participation
principles.

As the first step, it will extend finance assistance to five PKO
centers, training facilities, in Africa, such as Kenya and Egypt. It
has already earmarked 1.8 billion yen in the supplementary budget
for fiscal 2007 and will shortly outlay funds through the United
Nations Development Program (UNDP). It will also look into the
possibility of financing PKO centers in Asia, such as Thailand and
Malaysia.

13) ODA experts' panel in interim report calls for increased aid for
Africa

SANKEI (Page 5) (Full)
January 22, 2008

The experts' conference on international cooperation, an advisory
panel to Foreign Minister Masahiko Koumura and chaired by Takushoku
University President Toshio Watanabe, released its interim report on
future options for the nation's official development assistance
(ODA). The report emphasizes the importance of "strategy" and
"message" in determining ODA projects. The report expresses concern
about the recent significant reduction in the ODA budget, calling
for expanding non-reimbursable aid to Africa.

The interim report noted on Japan's aid for Africa: "When many other
countries and organizations are boosting their ODA disbursements,
Japan has halved its financial assistance over the past decade." It
then suggests increasing the number of ODA projects in Africa based
on grant aid in and after 2008 and establishing a consultative body
composed of representatives from the government, private firms, and
NGOs.

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On measures to fight global warming, the report proposes that Japan
should actively provide energy-conservation technology to poor
countries that find it difficult to take countermeasures due to a
lack of funds. As priority tasks, the report also lists the
following: (1) cooperation between the government and the private
sector, such as pooling citizens with rich experience abroad and
dispatching them to poor countries; (2) government aid for
investment and loan for development; and (3) studying offering loans
on a foreign currency basis to diminish exchange risks from
developing countries.

14) DPJ's Ozawa will not attend Davos Conference after all

YOMIURI (Page 4) (Full)
January 22, 2008

The Democratic Party of Japan (DPJ or Minshuto), the largest
opposition party, is now at odds as party head Ichiro Ozawa gave up
on his plan to attend the World Economic Forum (Davos Conference).
The DPJ had carried out coordination, since there were views calling
for Ozawa's attendance. Ozawa yesterday, however, told Secretary
General Yukio Hatoyama to attend the international conference in his
place.

Diet Affairs Committee Chairman Kenji Yamaoka told reporters the
reason for Ozawa having cancelled his plan: "His physical condition
seems a bit bad. He may be tired from stumping in Osaka (supporting
the candidate in the gubernatorial election)."

Regarding Ozawa's flip-flop, a junior lawmaker pointed out: "The
reality is that nobody in the DPJ can ask Mr. Ozawa about his real
intentions, as we are afraid of him." Although Hatoyama reportedly
is enthusiastic about attending the Davos Conference, there is an
icy view in the party, with one member saying, "What is he going to
do there? He will only expose his lack of preparations."

15) Economic Minister Ota in speech: Japanese economy can no longer
be called first-class

MAINICHI (Page 1) (Full)
January 19, 2008

"The Japanese economy can no longer be called first-class." In her
speech at the outset of the ordinary Diet session on Jan. 18, State
Minister in Charge of Economic and Fiscal Policy Hiroko Ota
unusually expressed a severe comment on the current state of the
Japanese economy, causing a buzz of excitement in the hall.

As the reason for her view, Ota cited: "The ratio of Japan's revenue
to the world's total income dropped below 10 PERCENT in 2006 for
the first time in 24 years. Gross domestic product (GDP) per capita
also slipped into 18th place among the Organization for Economic
Cooperation and Development (OECD) member countries." Japan's ratio
was 17.9 PERCENT in 1994. This figure has been reduced by half,
against the backdrop of slow growth in a deflationary economy and a
weakening yen.

After the speech, Ota stated: "Now that the world economy is
undergoing significant changes, it is necessary for Japan to carry
out reform to reinforce its growth dynamic, based on a hard look at
what Japan will be like five or ten years from now." By stressing a

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sense of alarm, she seems to have aimed to give momentum to reform.

16) Cabinet Office survey shows polarization among local areas, with
43 PERCENT saying their regions have vigor, and 53 PERCENT saying
they do not

MAINICHI (Page 3) (Full)
January 20, 2008

According to the results of a special local revitalization survey,
made public by the Cabinet Office, 53 PERCENT of the respondents
said that their regions lacked vigor, an increase of 8 points from
the previous survey conducted in June 2005. At the same time, 43
PERCENT of the respondents, up 4 points from the previous survey,
said that their regions had vigor. The results thus pointed to
polarization in local areas.

The Cabinet Office conducted a face-to-face survey of 3,000 men and
women over 20 years of age from last November through December.
Valid answers came from 1,667 individuals. Figures by region have
yet to be tallied.

Gloomy answers came from over 50 PERCENT of the respondents, with
37.9 PERCENT -- the largest group -- saying that their regions more
or less lacked vigor, up 8 points from the previous survey, and 15.3
PERCENT pointing to a complete lack of vigor. Meanwhile, 12.5
PERCENT said their regions had vigor, and 30.7 PERCENT indicated
that their regions were somewhat vigorous -- both showing increases
from the previous poll.

17) Russian banks to enter Japanese market as early as next year:
More than 10 banks considering possibility

MAINICHI (Page 1) (Full)
January 21, 2007

It appears likely that Russian banks will for the first time enter
the Japanese market as early as 2009. Russian Banks Association
(RBA) President Garegin Tosunyan revealed this during an interview
with the Mainichi Shimbun.

The economy of Russia, the world's second largest crude-oil
producer, is rapidly growing due to soaring crude oil prices.
Russian banks are suffering only relatively minor damage from the
U.S. subprime loan crisis. Assets held by Russian banks have reached
close to 100 trillion yen. According to Tosunyan, more than 10 banks
are considering opening branches in Japan.

He revealed that Bank for Foreign Trade (VTB) and Rosbank, leading
Russian banks, have already started considering such a possibility,
noting, "I am sure Russian banks will enter the Japanese market."
Japan's financial assets are a major attraction for Russian banks.
Tosunyan also said that they are interested in Japan's advanced
financial know-how.

He then added that they will open branches in Japan once they obtain
approval from the Japanese financial authorities and start
businesses that focus on lending. They are also reportedly
interested in taking part in money-lending services for individuals
and the credit card business. The chances are that they might try to
take a stake in Japanese companies.


TOKYO 00000152 011 OF 011


Foreign banks are also setting up shop in Russia. However, Tosunyan
underscored, "We must not increase the number of foreign banks
operating Russia. If they advance into Russia, the governments of
those foreign banks should also approve Russian banks operating in
their countries."

Russia's real growth rate for 2007 is expected to exceed 7 PERCENT .
According to RBA, the total assets held by the banking industry are
estimated to be approximately 21 trillion ruble (approximately 95
trillion yen). The figure is about five times the amount of five
years ago.

18) Global warming preventive measures: Japan lowest among developed
countries, dependency on coal blamed

TOKYO SHIMBUN (Page 1) (Full)
January 20, 2007

The World Bank has assessed progress of the implementation of
measures to combat global warming taken by various countries and
compiled the results as of Jan. 19. According the assessment, Japan
ranked last among industrialized countries. It ranked 61st among the
top 70 emitters.

The major cause of the poor assessment result is attributable to the
increased use of coal, which is cheap but emits a great deal of
carbon dioxide (CO2), since the liberalization of the power
supplying business in the latter half of the 1990.

Many observers were of the opinion that Japan was on the top level
in terms of energy efficiency. However, it is losing its edge as
other countries are beginning to catch up with it. Japan has yet to
increase the use of renewable energy, such as wind power. Its
tendency to depend on coal remains unchanged with its coal usage in
fiscal 2006 marking a 1.2 PERCENT increase from the previous year.
The government will likely be urged to drastically review its
approach to global warming, centering on its system of supplying
electric power.

The World Bank assessed various countries in terms of (1) the ratio
of use of fossil fuels to the amount of energy used; (2) the ratio
of oil and natural gas to the total amount of fossil fuels used; (3)
energy usage per gross domestic product (GDP); (4) GDP per capita;
and (5) population. It looked at the assessment results and whether
there was an increase or decrease in CO2. It mapped out the survey
results using figures and ranked the surveyed countries.

The analysis of the results found that Japan's CO2 emissions have
increased more than the level expected from its GDP and growth in
its population. Among the 70 countries, 56 countries are shifting to
natural gas and oil, which produce fewer emissions than coal.
However, the use of coal in Japan has increased. As a result, its
CO2 emissions have risen by approximately 42 million tons.

Japan's use of energy per GDP is also increasing, while such in 49
countries, including the U.S., Germany, China and India, has
decreased. The overall assessment of Japan was lowest among
industrial countries. It even ranked lower than China and India.

Denmark, Germany, Sweden and Britain occupied the top four spots.

SCHIEFFER

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