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Cablegate: Japanese Morning Press Highlights 01/09/08

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UNCLAS SECTION 01 OF 12 TOKYO 000056

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 01/09/08


Index:

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

Security and defense agenda:
4) With antiterrorist bill about the pass Diet, Prime Minister
Fukuda in speech expressed determination to restart MSDF refueling
service in Indian Ocean (Mainichi)
5) Storm in the Upper House as three opposition parties balk at
supporting DPJ's proposed continuing deliberation of antiterrorism
bill next Diet session (Nikkei)
6) Upper House now deliberating Democratic Party of Japan's (DPJ)
own antiterrorism bill that counters the government's version
(Mainichi)
7) DPJ: "Currently not possible" for SDF dispatch to Afghanistan
under its antiterrorism bill (Yomiuri)
8) New Komeito cautious about enacting a permanent SDF dispatch law,
but DPJ is positive about the concept (Mainichi)
9) Weapons-use standard is focal issue of a permanent SDF dispatch
law now being considered (Yomiuri)
10) Akiyama testifies in Upper House as unsworn witness, but
opposition camp, not satisfied with his responses, wants him to
return as sworn witness (Tokyo Shimbun)
11) Foreign Ministry to speed up investigation into Akiyama's
Japan-U.S. Peace and Cultural Exchange Association (Yomiuri)
12) Chief Cabinet Secretary Machimura tells press that the high cost
of building Marine housing in Guam for their relocation needs
reconsideration (Sankei)
13) Government considering deploying PAC3 missiles as part of
antiterrorist security blanket for the upcoming G8 Summit (Sankei)

14) Prime Minister Fukuda, DPJ President Ozawa to finally have their
one-on-one debate in the Diet (Mainichi)

15) Congressman Mike Honda, now visiting Tokyo, calls on prime
minister to take lead in making formal apology to former comfort
women (Asahi)

16) Government making efforts to up attendance of senior dignitaries
in upcoming Africa development conference, now at 36 countries with
70 PERCENT of leaders coming (Nikkei)

Global warming:
17) METI plans Indonesia initiative that would apply trade insurance
to greenhouse-gas reduction project in Indonesia (Yomiuri)
18) Government predicts that by the end of this century, average
temperature in Japan will rise 4.7 degrees Centigrade turning
country tropical (Tokyo Shimbun)

19) Survey of personal savings in Japan finds a drop in a decade to
one-third of what it was before (Mainichi)

Articles:

1) TOP HEADLINES

Asahi:
Government officials' direct contacts with lawmakers to be banned in
principle


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Mainichi:
Fire-resistant building material by 40 makers found inappropriate

Yomiuri:
New antiterrorism law to be enacted within this week

Nikkei:
Cabinet Office to toughen measures to tackle illegal business
practices to protect consumers

Sankei:
Correction of pension records may reduce pension benefits in some
cases

Tokyo Shimbun:
Average temperature in Japan to rise by up to 4.7 C by century's
end

Akahata:
Akiyama testifies that Ishiba was present at Mitsubishi party;
Kyuma, Nukaga also mentioned

2) EDITORIALS

Asahi:
(1) Akiyama testimony: Darkness surrounding defense interests
deepens
(2) Drunk driving deserves harsher penalty

Mainichi:
(1) DPJ's response to new antiterrorism legislation hard to
understand
(2) Drunk driving needs harsher punishment

Yomiuri:
(1) Global chain reaction of market plunges; U.S. must stop vicious
cycle
(2) Fukuoka case illustrates complexities of law

Nikkei:
(1) Tasks for Japanese corporations eying growth under adversity
(2) Shed light on suspicions surrounding Japan-U.S. Center for Peace
and Cultural Exchange

Sankei:
(1) Penalty for dangerous driving must be reviewed
(2) Tokyo taxis ban smoking

Tokyo Shimbun:
(1) Decision on Fukuoka drunk driving case points to need for clear
penalty criteria
(2) Akiyama must tell truth before Diet to convince public

Akahata:
(1) Agricultural policy must be shifted starting in 2008

3) Prime Minister's Official Residence (Kantei)

Prime Minister's schedule, January 8

NIKKEI (Page 2) (Full)
January 9, 2008

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09:01
Attended a cabinet meeting at the Kantei. Met Internal Affairs
Minister Masuda and Vice Minister Takino.

10:14
Met Cabinet Affairs Office Director General Chishiro.

13:02
Attended a Lower House plenary session.

14:40
Met International Judicial Court Judge Owada.

15:08
Posed for a government publicity photo. Met Deputy Chief Cabinet
Secretary Futahashi. Followed by Masuda and Regional Revitalization

SIPDIS
Office Head Yamamoto, with Assistant Deputy Chief Cabinet Secretary
Saka present.

16:01
Met Chief Cabinet Secretary Machimura. Later, met Assistant Deputy
Chief Cabinet Secretaries Saka and Ando, Finance Ministry Budget
Bureau Director General Sugimoto, and others. Followed by Machimura,
Assistant Deputy Chief Cabinet Secretaries Ando and Yanagisawa, and
Cabinet Intelligence Director Mitani.

17:19
Attended a new year's meeting sponsored by Jiji Press, the Research
Institute of Japan, and other organizations at the Teikoku Hotel.

17:39
Arrived at the Kantei.

19:42
Returned to his private residence.

4) Fukuda expresses eagerness in speech for resuming MSDF refueling
operation

MAINICHI (Page 5) (Full)
January 9, 2008

Prime Minister Yasuo Fukuda delivered a speech at a New Year party
held by Jiji Press Co. at a Tokyo hotel yesterday, in which he said:
"Through my visits to foreign countries, I realized that they have
strong trust in Japan and have high opinions about Japan. In view of
such international circumstances It is vital that we move ahead
steadily." The prime minister expressed his intention thus to push
ahead with international cooperation, having in mind such efforts as
the resumption of the Maritime Self-Defense Force's refueling
operations in the Indian Ocean.

Fukuda added: "Politics alone always seems to be blamed, so at such
a point, I always hold myself accountable."

5) Lack of unity displayed in opposition camp over new antiterror
bill in final stage

NIKKEI (Page 2) (Excerpts)
January 9, 2008


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A lack of unity has been displayed in the opposition camp in the
final stage of deliberations on the government's new antiterrorism
bill to resume the Self-Defense Force's refueling mission in the
Indian Ocean. The cause of the disarray is a proposal presented by
the Democratic Party of Japan (DPJ) with the aim of carrying the
bill over to the ordinary Diet session. The main opposition party
anticipated that if a vote on the bill was put off, the ruling camp
would pass the bill by a two-third House of Representatives
overriding vote without fail and that eventually, the ruling camp
would come under heavy fire. Other opposition parties, however,
unanimously opposed the DPJ proposal.

DPJ House of Councillors Chairman Azuma Koshiishi made this proposal
in an executive meeting held on the night of Jan. 7. The opposition
camp planned to reject the bill in a meeting of the Upper House
Foreign Affairs and Defense Committee on the 10th and in an Upper
House plenary session on the 11th. Even if a decision is made to
carry the bill over to the next regular Diet session, the ruling
camp will be able to bring back the bill into the Lower House for a
revote on the 12th - 60 days after the bill was sent to the Upper
House. The aim of the proposal was to underscore the ruling camp's
high-handedness.

For a continued discussion on the bill, it will be necessary to take
a vote at both the committee meeting and the executive meeting.
Since the DPJ does not hold a single-party majority in the Upper
House, Diet Affairs Committee Chairman Kenji Yamaoka called on his
counterparts of other opposition parties in their meeting yesterday
to render cooperation, remarking: "If the ruling bloc uses Lower
House revote, its high-handed manner will be made clear."

But the Japanese Communist party, the Social Democratic Party, and
the People's New Party expressed opposition to a continued
discussion, based on the initial policy that they should vote it
down in order to demonstrate the intention of the Upper House.

Meeting with DPJ President Ichiro Ozawa in the Diet building, SDP
President Mizuho Fukushima: "We are against both the government's
new antiterrorism bill and the DPJ counterproposal. We cannot agree
on a continued discussion, either." Ozawa just said: "We must kill
the bill," giving no clear-cut explanation about the party's
proposal.

6) Upper House launches deliberations on DPJ antiterror
counterproposal

MAINICHI (Page 2) (Full)
January 9, 2008

The House of Councillors' Foreign Affairs and Defense Committee
carried out its first deliberations yesterday on the Democratic
Party of Japan's (DPJ) counterproposal to the government's new
antiterrorism bill that would enable the Maritime Self-Defense Force
to resume its refueling mission in the Indian Ocean.

Masayoshi Hamada, a New Komeito member, said: "Why was (a
counterproposal) presented in the final phase (of the current Diet
session)? Is it (the DPJ) going to stall the deliberations?"
Kiichiro Asao, the DPJ member who submitted the counterproposal, was
hounded for an explanation: "Different from the position of being
the government or the ruling camp, we took considerable time to draw
it out."

TOKYO 00000056 005 OF 012

Chief Cabinet Secretary Nobutaka Machimura critically commented:
"The counterproposal specifies that no measures will be taken for
the time being. What is the point in discussing a bill proposing no
specific measures?" In response, Asao asserted: "We will work to
help reform the security area and stop the strife (by armed groups
in Afghanistan)."

7) SDF dispatch impossible for time being: DPJ

YOMIURI (Page 4) (Full)
January 9, 2008

The House of Councillors Foreign Affairs and Defense Committee met
yesterday afternoon for its first debate on a counterproposal of the
leading opposition Democratic Party of Japan (Minshuto) to a
government-introduced antiterrorism bill resuming the Maritime
Self-Defense Force's refueling mission in the Indian Ocean. The
DPJ's counterproposal says Japan may send SDF troops to Afghanistan
if there is a deal between disputed parties to stop their conflict.
"There is still no such accord in Afghanistan," Keiichiro Asao,
defense minister in the DPJ's shadow cabinet, stated before the
committee. With this, he indicated that Japan cannot send SDF
personnel to Afghanistan for the time being even if the DPJ's
counterproposal is legislated.

8) Discussion of permanent SDF-dispatch legislation risks escalating
into realm of political realignment: DPJ more eager for legislation
than New Komeito

MAINICHI (Page 5) (Excerpts)
January 9, 2008

The government decided yesterday to earnestly begin working on
establishing a permanent law that would set conditions for
dispatching the Self-Defense Forces on overseas missions. The
government's move comes from its desire to avoid Diet deliberations
being stalled every time the envisaged new antiterrorism special
measures legislation, a time-limited law, is to be extended. The
major opposition Democratic Party of Japan (DPJ or Minshuto) is more
eager to enact a permanent law than the New Komeito, the LDP's
coalition partner, which is cautious about it. As such, the question
of a permanent law that concerns the foundation of security involves
the risk of escalating into the realm of possible political
realignment.

Chief Cabinet Secretary Nobutaka Machimura in yesterday's House of
Councillors Foreign Affairs and Defense Committee session said:
"Under the current Diet situation, we would like to study ways to
enact a permanent law early upon obtaining the DPJ's consent." He
thus revealed a plan to ask for the DPJ's cooperation after
conducting discussions in the ruling camp.

An agreement was reached on the establishment of a permanent law
when Prime Minister Yasuo Fukuda held party-head talks with DPJ
President Ichiro Ozawa last November. The DPJ also released late
last year its counterproposal to the government's antiterrorism bill
that mentioned the need for enacting basic legislation pertaining to
security rules.

Enacting the new antiterrorism legislation has been hard-going in
the ongoing extraordinary Diet session. The view that extending such

TOKYO 00000056 006 OF 012


legislation every year is not pragmatic is gaining ground and is
behind the government and ruling parties' move to conduct
full-fledged discussions on a permanent law. The LDP's defense
policy subcommittee chaired by Defense Minister Shigeru Ishiba
released in 2006 a draft of an international peace cooperation bill.
The government and ruling parties will conduct discussions based on
this bill.

9) Weapons-use standards the focal issue in planned permanent
SDF-dispatch legislation

YOMIURI (Page 4) (Abridged)
January 9, 2008

The government yesterday entered into coordination to establish a
permanent law for Japan to send the Self-Defense Forces on overseas
missions. A government-introduced antiterrorism bill, which is
intended to resume the Maritime Self-Defense Force's refueling
activities in the Indian Ocean, is now expected to be enacted into
law within the week. "We're now ready to discuss the pending issue
of establishing a permanent law," a government official said.

The government used to create a time-limited ad hoc law in order for
Japan to send SDF troops for each overseas event. The planned
permanent law is intended to quicken Japan's response to
international peace cooperation activities.

The ruling coalition of the Liberal Democratic Party and New Komeito
will set up a project team this month to create a permanent law,
based on an international peace cooperation bill worked out in
August 2006 by an LDP subcommittee.

The focus will be on the advisability of easing Japan's standards
for the SDF's use of weapons.

The LDP subcommittee's draft bill substantially eases the current
weapons use standards. It allows SDF personnel on overseas missions
to use weapons to protect civilians and foreign troops when they are
attacked within the area of SDF activities. In addition, it also
allows SDF personnel to use weapons in order for them to carry out
their missions. Within New Komeito, however, there are cautious
views about easing the standards. Meanwhile, one New Komeito
lawmaker admits the need for SDF personnel to use weapons to protect
civilians and foreign troops. "Otherwise," this lawmaker added, "it
will be difficult to work together with civilians."

The LDP subcommittee's draft bill also allows the government to send
SDF troops overseas at its own discretion without a United Nations
resolution or an international request. This point is also expected
to be in focus for coordination.

10) Akiyama testifies in Diet as unsworn witness over
defense-related scandals; Growing calls for putting end to issue in
ruling coalition; Opposition camp calling for sworn testimony

TOKYO SHIMBUN (Page 2) (Full)
January 9, 2008

Naoki Akiyama, executive director of the Japan-U.S. Center for Peace
and Cultural Exchange, yesterday testified as an unsworn witness
before a Diet panel (in connection with allegations that the center
received money from the scandal-tainted defense equipment trading

TOKYO 00000056 007 OF 012


firm Yamada Corp). A senior member of the ruling Liberal Democratic
Party, however, said: "No problematical facts came up." Therefore,
many in the LDP-New Komeito ruling coalition now think the
opposition's pursuit ended in failure and expect that the curtain
will be closed on the matter.

A former cabinet member from the LDP stressed: "Since there was no
allegation against politicians, the issue will be settled." A
veteran LDP lawmaker emphasized: "The Diet has its limits. Justice
should shed light on the allegations."

A senior New Komeito member also said:

"The LDP seemed to have been worried. Since the allegations did not
involve any cabinet ministers, there was thankfully no effect on the
new antiterrorism special measures bill."

However, main opposition Democratic Party of Japan (DPJ or Minshuto)
Diet Affairs Committee Chairman Kenji Yamaoka said: "Our doubts have
deepened." The DPJ intends to call for sworn testimony by Akiyama at
the ordinary Diet session.

Yamaoka told reporters yesterday: "Unless sworn testimony is
conducted, the truth will not be cleared up. We want to do our best
to drain the puss from the Defense Ministry in the ordinary session
as well."

Japanese Communist Party Diet Affairs Committee Chairman Keiichi
Kokuta stated: "It is necessary to shed light on the allegations
through sworn testimony."

With Akiyama's denial that his center received funds from Yamada in
mind, Social Democratic Party Chairperson Mizuho Fukushima pointed
out: "The suspicions have deepened. We should take a scalpel to the
allegations."

People's New Party Secretary General Hisaoki Kamei expressed the
view that further pursuit would be needed, saying: "We are most
interested in relations between Akiyama and politicians, and it has
not been fully cleared up in the testimony."

11) MOFA decides to conduct in February inspection of Japan-U.S.
Center for Peace and Cultural Exchange ahead of schedule

YOMIURI (Page 2) (Full)
January 9, 2008

The Ministry of Foreign Affairs (MOFA) yesterday decided to conduct
in February a periodical on-the-spot inspection initially slated for
this summer of the Japan-U.S. Center for Peace and Cultural
Exchange, which was recently raided by prosecutors from the Tokyo
District Public Prosecutors Office in connection with the defense
scandal involving the defense contractor Yamada Corp. Behind this
decision is MOFA's judgment that as a government office responsible
for the Japan-U.S. Center, MOFA needs to shed light on the alleged
money scandal involving the organization because its Executive
Director Naoki Akiyama's relations with Yamada Corp. are questioned
in the Diet.

The on-the-spot inspection is carried out in accordance with civil
code and by mutual consent made at a cabinet ministerial meeting in
2001. MOFA will notify the Japan-U.S. Center of the date for the

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inspection by the end of the month and conduct the inspection.

In its previous inspection carried out from April through May of
2005, MOFA recognized the facts that the Japan-U.S. Center had been
lax in its way of accounting, and that it had engaged in businesses
not mentioned in its articles of incorporation. In September of that
year, MOFA in the name of its minister instructed the Japan-U.S.
Center to improve all these matters.

12) Chief Cabinet Secretary Machimura: Need for a review of
construction costs for U.S. military housing to be built in Guam

SANKEI (Page 5) (Full)
January 9, 2008

Chief Cabinet Secretary Nobutaka Machimura at a press conference
yesterday responded to the observation that the U.S. government's
estimated construction amount of about 70 million yen per housing
unit to be built in Guam for U.S. Marines being relocated from
Okinawa is too expensive. He stated:

"We still need to boil down the issue. If we tap the private
sector's vitality, the cost would be reduced. We should review fully
how far we will be able to cut costs through competitive bidding."

13) PAC-3 deployment eyed for summit security

SANKEI (Page 1) (Slightly abridged)
January 9, 2008

Japan will host a summit meeting of the Group of Eight (G-8) nations
in July this year at Toyako (Lake Toya) in Hokkaido. On that
occasion, the Self-Defense Forces will be tasked with security
against terrorism and other eventualities. The Defense Ministry is
planning to ready the SDF for a security setup going beyond that at
the time of the Kyushu-Okinawa summit in 2000, sources revealed
yesterday. The SDF will be readied to deploy airborne warning and
control system (AWACS) aircraft. In addition, the SDF will also
ready Patriot Advanced Capability 3 (PAC-3) ground-to-air guided
missiles and step up its readiness to scramble interceptor fighters,
according to the sources.

The Defense Ministry is going to gather information from other G-8
member nations about their security setups. At the same time, the
ministry will also set up a G-8 summit taskforce in the Joint Staff
Office of the Ground, Maritime, and Air Self-Defense Forces. The
ministry is "studying every possibility," according to one of its
senior officials.

The GSDF will be tasked with heliborne airlifts for G-8 leaders. In
addition, the GSDF will also station its guards of honor upon their
arrival. Learning a lesson from the Aum Shinrikyo 1995 sarin attack
on the Tokyo subway system, the GSDF sent a chemical protective
taskforce for the Kyushu-Okinawa summit. This time, the GSDF will
ready a chemical protective taskforce from its Higashichitose
garrison in Hokkaido. The GSDF is also planning to send the
taskforce as needed to its Horobetsu garrison in the city of
Noboribetsu, which is situated close to the G-8 summit venue.

Russian and Chinese leaders will also participate in the G-8 Lake
Toya summit, so the Defense Ministry deems that the possibility of a
ballistic missile attack is extremely low. Even so, the ministry

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will give first consideration to airborne warning, according to one
of its senior officials. The ASDF currently deploys PAC-3 missiles
at its Iruma base in Saitama Prefecture and at the GSDF's Narashino
garrison in Chiba Prefecture. The ministry plans to have ASDF PAC-3
batteries sealifted to Hokkaido on MSDF transports for deployment to
GSDF garrisons near Lake Toya.

The MSDF is also planning to task its squadrons with warning
activities at sea as it did at the time of the Kyushu-Okinawa
summit. The MSDF has plans to send missile boats and helicopter
destroyers to Uchiura Bay near Lake Toya and to stage Aegis-equipped
ships in the Sea of Japan and in the Pacific Ocean.

14) Fukuda, Ozawa finally to face off in debate today

MAINICHI (Page 2) (Slightly abridged)
January 9, 2008

Prime Minister Yasuo Fukuda and Democratic Party of Japan (DPJ)
President Ichiro Ozawa will finally face off in a Diet debate today.
The two leaders discussed a permanent law governing the dispatch of
the Self-Defense Forces (SDF) overseas in their meeting in November.
This issue will also take center stage in the debate today.

This will be the first debate between the ruling and opposition
party leaders since the one between former Prime Minister Shinzo Abe
and Ozawa in the ordinary Diet session last May. After the Fukuda
administration was inaugurated, a debate between Fukuda and Ozawa
was planned for Oct. 31, but since they held a one-on-one meeting,
the debate was cancelled. Even afterwards, both sides planned a
party-head debate for Nov. 7 and Dec. 12, but these were also
dropped in the aftermath of political turmoil -- the first was due
to Ozawa's announcement of resigning as the top leader of his party
and the second because of a showdown between the ruling and
opposition camps over whether to extend the extraordinary Diet
session. A senior DPJ member said: "Since the grand coalition
concept that was taken up in the party-head talks drew much
attention, we judged it desirable to take time until the dispute
over this issue quieted down." Ozawa intends to devote most of the
time allocated to him to the pension record-keeping fiasco, which
significantly brought down the rate of public support for Prime
Minister Fukuda. Ozawa also told in a TV program on Jan. 7: "(In the
party-head debate,) I will bring up the pension issue to draw out
(clear-cut) replies. The government and the ruling camp have made
inconsistent statements and are quite irresponsible." He also plans
to insist that the current provision tariff on the special resources
for road construction should be abolished.

The proposed permanent antiterror legislation was regarded in the
party-head talks as one of the major themes to be taken up in policy
talks on forming a grand coalition. The government has also decided
to study legislation with the aim of enacting a related bill in
fiscal 2008. Given these circumstances, attention is paid to what
approach Ozawa will take on this issue.

Prime Minister Fukuda told reporters yesterday: "I will stand my
ground. I am willing to make replies in a sincere manner."

15) US Congressman Honda: Prime Minister Fukuda should take
initiative in offering apology to wartime comfort women

ASAHI (Page 4) (Full)

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January 9, 2008

U.S. Congressman Mike Honda (D-CA), who took the leadership last
year in adopting a comfort women resolution in the House of
Representatives, held a press conference yesterday in Tokyo. The
resolution called on Japan to offer a formal apology to comfort
women, the Japanese euphemism for foreign women who were forced into
sexual slavery to the Japanese Imperial Army. He stated:

"The Japanese government should admit the fact and offer a clear
apology. To that end, Prime Minister Yasuo Fukuda will take the
leadership so that the Diet will support a decision by the
government for historical responsibility."

Honda also stated: "The Japanese general public does not have enough
information (about past history) like the U.S. public. I want them
to get information and determine what they should do." Honda
reportedly visited Japan to boost exchanges with Japanese and South
Korean lawmakers.

16) Top leaders of 36 African countries, 70 PERCENT of total,
expected to attend TICAD

NIKKEI (Page 2) (Full)
January 9, 2008

The government will host the fourth Tokyo International Conference
on African Development (TICAD) in Yokohama in May. Some 36 countries
- 70 PERCENT of all nations on the African continent - have told
the Japanese government that their top leaders will attend, sources
revealed. The figure is 1.5 times the number of the participants in
the previous conference. The government will continue its efforts to
further encourage African countries to send their top leaders to the
upcoming TICAD and increase the number of participants. Japan wants
to boost its presence in Africa by hosting TICAD, as China is now on
a diplomatic offensive toward Africa.

TICAD was launched in 1993 under Japan's initiative in order to help
develop Africa, and it is held in Japan every five years. Just
recently Tanzania, Algeria, South Africa, and Mali decided to send
their top leaders to the 4th TICAD. Last week Foreign Minister
Masahiko Koumura visited Tanzania as the first incumbent foreign
minister in 29 years and asked for President Kikwete's cooperation
so that as many as African countries as possible would send their
top leaders to the 4th TICAD.

China is expanding its aid-oriented diplomacy toward Africa with the
aim of securing rare metals and oil resources. In September 2007
China hosted a foreign ministerial session of representatives from
48 African countries in the United Nations Headquarters. With an eye
on China's moves, Japan is stepping up its aid to Africa.

17) METI to apply trade insurance to project aimed at reducing
emissions of greenhouse gases

YOMIURI (Page 2) (Full)
January 9, 2008

The Ministry of Economy, Trade and Industry (METI) yesterday
revealed its plan to apply the trade insurance system to a project
the trading house Sumitomo Corporation plans to implement in
Indonesia with the aim of reducing emissions of greenhouse gases.

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This will be the first Japanese firm's overseas project intended for
the reduction of emissions of greenhouse gases to which trade
insurance will be applied. The purpose is to lessen the risk firms
that address environmental businesses abroad may suffer and boost
their efforts to implement measures against climate change.

Sumitomo Corp. has taken part in a 13-million-dollar (1.4 billion
yen) project aimed at collecting methane gas an Indonesian starch
company emits in the process of manufacturing starch and using that
methane gas as a fuel for private power generation. Sumitomo Corp.
finances the projects.

Nippon Export and Investment Insurance (NEXI), an independent
administration agency under METI's jurisdiction, will apply
"overseas project loan credit insurance" to Sumitomo's financing.
This insurance will cover the losses Japanese firms will suffer from
uncollectable loans after financing foreign firms. The insurance
will cover 97.5 PERCENT of the loan amount. The duration of the
insurance to be applied to Sumitomo is three or so years.

The Kyoto Protocol, which obligates every nation to reduce emissions
of greenhouse gases, has the Clean Development Mechanism (CDM). If
under the CDM, firms in industrialized countries implement projects
aimed at cutting emissions of greenhouse gases in developing
countries, those firms can get emission quotas. If firms sell their
emission quotas to their government, those quotas will help the
government to cut emissions of greenhouse gases.

18) Global warming to become serious in Japan by end of this
century: Average temperature likely to rise up to 4.7 degrees C

TOKYO SHIMBUN (Top Play) (Full)
January 9, 2008

The Environment Ministry yesterday finalized the results of a
simulation it ran regarding the impact of global warming on the
Japanese archipelago by the end of this century. According to the
simulation, average temperature from 2070 through 2099 would rise
1.3-4.7 degrees Celsius, compared with the level in the 1961-1990
period. The number of sweltering nights would exceed 40, up more
than 10 days from the current average in Tokyo. The ministry has
also estimated that the frequency of torrential rains and large
typhoons involving more than 200 mm of rainfall would also increase.


The simulation was carried out based on the Intergovernmental Panel
on Climate Change's (IPPC) climate mode diagnosis program. The
simulation adopted three model societies -- one that restrains the
globalization of the economy, one that attaches importance to energy
balance, and one that has achieved a good balance between
environment preservation and economic development. The worst model
case of a society that depends completely on fossil fuels was not
applied.

The data was submitted to the ministry's committee on the impact of
global warming and adaptation for considering what measures Japan
should take on the growing impact of global warming.

The IPCC last year released its projection in its fourth assessment
report, which noted that the average temperature on earth will rise
up to 6.4 degrees by the end of this century.


TOKYO 00000056 012 OF 012


The ministry also reported the results of the estimates the
Meteorological Agency compiled in 2005 that the average temperature
in the 2081-2100 period would rise between 2-3 degrees from the
1981-2000 period. An Environment Ministry Research and Information
Office official noted, "Though these are estimates, I must say that
even if our society makes efforts to prevent global warming, a rise
in temperature by several degrees would be unavoidable. This is an
extremely severe situation. We would like to compile an interim
report on what measures Japan should take."

19) Savings rate drop to one-third of level 10 years ago, marking
record low of 3.2 PERCENT : Wage increase sluggish as nation turns
into aging society

MAINICHI (Page 1) (Full)
January 9, 2008

Japanese households' savings rate is rapidly dropping. According to
a national economic accounting report for fiscal 2006, released by
the Cabinet Office, the household savings rate for that year was 3.2
PERCENT , down from 3.4 PERCENT recorded in fiscal 2004. The figure
is the lowest ever since the current calculation standard was
adopted in fiscal 1996, dropping 0.3 points from the previous year.
The rapid aging of society and sluggish wage growth are ascribable
to the drop. The savings rate peaked in fiscal 1997 with 11.4
PERCENT . However, the rate dropped below one-third of the fiscal
1997 level in only 10 years.

The household savings rate indicates the ratio of income saved from
disposal income determined by subtracting tax and other expenditures
from total household income. It has been said that Japanese like
saving money. The household sector enjoyed high savings rate in the
past. However, the rate has dwindled with 23.1 PERCENT marked in
fiscal 1975 (calculation based on the old standard) as the peak. The
sluggish growth in wages due to the deflationary economy in recent
years has accelerated the downtrend of the savings rate.

The national income in fiscal 2006 rose 1.8 PERCENT (373.2 trillion
yen), compared with the preceding year, backed by upbeat corporate
performances. However, the growth of employee compensation (263
trillion yen) paid to employees by employers is 1.3 PERCENT . The
labor distribution rate, which indicates the ratio of employee
compensation to national income, marked 70.5 PERCENT , down 0.3
points from the previous year. The situation where households are
not benefiting from the high income companies are earning is
continuing.

DONOVAN

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