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Cablegate: Daily Summary of Japanese Press 02/07/08

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UNCLAS SECTION 01 OF 11 TOKYO 000331

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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: DAILY SUMMARY OF JAPANESE PRESS 02/07/08


INDEX:

(1) 23 organizations file request with U.S. consulate to return
Itazuke Air Base

(2) Rally held at Ishikari Bay New Port against Aegis-equipped John
S. McCain

(3) DPJ opposes planned relocation of U.S. aircraft training to
Chitose

(4) Prime Minister Fukuda uses experts councils to give his
administration a boost

(5) Fierce argument on whether to approve foreign investment in
airport operators: Security vs. growth strategy

(6) Discord growing in Fukuda cabinet over foreign ownership of
airports; Judgment left to Kantei

(7) Monetary cooperation not in sight: What measures will G-7 to be
held in Tokyo on Feb. 9 propose in dealing with subprime mortgage
crisis?

(8) Indonesia certain to reduce the current level of its LNG exports
to Japan to one-fourth in 2010

(9) Will Nobuteru Ishihara in Yamasaki faction declare candidacy for
LDP presidential election?

ARTICLES:

(1) 23 organizations file request with U.S. consulate to return
Itazuke Air Base

AKAHATA (Page 4) (Full)
February 7, 2008

Part of an aging building on U.S. Itazuke Air Base at Fukuoka
Airport is scheduled to be demolished by the end of June this year.
Yesterday, 23 peace and democratic organizations, including the
Japanese Communist Party Fukuoka Prefectural Committee and the
Fukuoka Prefecture Reformist Council to Defend Peace and Livelihood,
filed requests with the Kyushu Defense Bureau and the U.S. Consulate
in Fukuoka, seeking the U.S. base be completely removed and returned
on the occasion of the building's demolition. The group of
representatives was accompanied by Takaaki Tamura, Kiyoshi Shinoda
and Tokiko Kobayashi, who are scheduled to run in the next Lower
House election on the JCP ticket for the Kyushu-Okinawa Bloc in the
proportional representation segment.

According to the requests, U.S. Itazuke Air Base sits on the south
side of the Fukuoka Airport international terminal building.
Exclusively used by the U.S. military during the Korean War and the
Vietnam War, the Itazuke base and Hakata Port suffered extensive
damage from U.S. military aircraft crashes, rapes, robberies by U.S.
servicemen and the like. The airport's runway is still being used by
the U.S. military. Reportedly, some 100 U.S. military cargo planes
fly into the base annually, and military supplies, including
ammunition, are transported to Sasebo, Nagasaki Prefecture, by
land.


TOKYO 00000331 002 OF 011


The plan is designed to demolish two-thirds of the warehouse on the
U.S. military area (of about 22,000 sq. meters) to make it into a
vacant lot. The Kyushu Defense Bureau notified the Itazuke Base
Reversion Promotion Consultative Council, chaired by Fukuoka
Municipal Assembly President Hiroshi Kawaguchi, of the plan last
November.

A Kyushu Defense Bureau Planning Department Local Coordination
Division official indicated that there is a plan for (the U.S.
military) to use the vacated area, adding, "Totally returning the
site immediately to Japan is difficult. We will continue talks (with
the U.S. military), seeking the base's return."

Meanwhile, a U.S. consulate officer refused to meet the
representatives. They then handed a letter of requests addressed to
President George W. Bush to a consulate guard and chanted in front
of the consulate, calling for a total removal and return of the
Itazuke base and refusal of the missile cruiser USS Princeton,
scheduled to enter Hakata Port on Feb. 11.

(2) Rally held at Ishikari Bay New Port against Aegis-equipped John
S. McCain

AKAHATA (Page 4) (Abridged slightly)
February 7, 2008

The liaison council to defend the peace of the city of Ishikarai,
headed by Hideo Masujin, held a rally at Bannaguro pier in protest
against entrance yesterday morning into Ishikari Bay New Port
straddling Ishikari and Otaru cities by the Aegis-equipped U.S. Navy
destroyer USS John S. McCain of the Seventh Fleet. The rally was
attended by some 100 protesters from the two cities.

This is the second time for a U.S. naval vessel to enter Ishikari
New Port, following last year. In the gusty wind, the protesters
chanted against the birthed John S. McCain, "Go home, U.S. naval
vessel! Ishikari Bay must not become a military port!"

Hokkaido Confederation of Trade Union Chief Secretary Masanori
Komuro said:

"The U.S. military is aiming to enter Otaru Port on Feb. 7, relocate
the fighter plane training to the Chitose base, and conduct a
Japan-U.S. joint exercise at the Yausubetsu Training Range. Let us
fight tooth and nail to prevent all of Hokkaido from becoming a
base."

Confederation Otaru Region President Kaoru Aoyagi went:

"Backed by citizens' voices, Otaru once refused a U.S. naval
vessel's port call. A mayoral race is also going on in Iwakuni,
Yamaguchi Prefecture, against the move to strengthen the U.S. base
there. Let's spread the movement by joining hands with other
municipalities across the country."

Shoko Yamasaki, 26, of the Democratic Youth League of Japan said in
a strong tone:

"A port call during the Sapporo Snow Festival by the U.S. vessel
that is killing people in the Iraq war is intolerable."

Satoshi Miyauchi, who will run in the next Lower House election on

TOKYO 00000331 003 OF 011


the Japanese Communist Party's ticket to seek a Hokkaido
proportional representation seat, also joined the rally and
delivered a speech.

(3) DPJ opposes planned relocation of U.S. aircraft training to
Chitose

MAINICHI NET (Full)
February 7, 2008

The Democratic Party of Japan, Hokkaido, urged the Hokkaido
government yesterday to convey to the central government its
opposition to the relocation of U.S military aircraft training to
the Chitose base, scheduled for later this month, reasoning that it
will seriously threaten the peace of Hokkaido and the safety and
security of people in Hokkaido.

(4) Prime Minister Fukuda uses experts councils to give his
administration a boost

SANKEI (Page 5) (Slightly abridged)
February 6, 2008

Prime Minister Yasuo Fukuda has set up experts councils, such as the
National Council on Social Security, in the Prime Minister's
Official Residence since taking office. The prime minister's aim is
to play up his own political identity. Some have said that there is
the possibility that his efforts will go nowhere.

In a board meeting on Feb. 4 of the ruling Liberal Democratic Party
(LDP), Fukuda revealed a policy of launching an experts panel on
environmental issues. He stressed to reporters: "I want to create an
organization like a control tower. I also want to set up council to
study what industrial circles and the public should aim for."

Fukuda is looking toward the July Group of Eight summit, in which
the battle against global warming will become a major topic of
discussion. "He is eager to come up with environmental policy that
can appeal to the international community," a person close to Fukuda
said.

The prime minister late last year formed the Council on Reform of
the Defense Ministry to deal with the bribery case involving the
former vice defense minister and the Foreign Policy Study Council.
Along with environmental issues, he is focusing on consumer
affairs.

Fukuda announced on Jan. 4 a policy of integrating consumer
administration extending over several ministries and agencies. In
the wake of the Chinese gyoza dumplings scare, he declared that he
would establish Consumer Administration Headquarters earlier than
planned, aiming at reaching a conclusion as early as April.

Meanwhile, he has been indifferent to the Education Revitalization
Council, which was set up by former Prime Minister Shinzo Abe.

Fukuda told reporters last evening: "Issues related to various
ministries and agencies cannot be pushed ahead because of the evils
of the vertically fragmented system of administration." A government
official also underscored: "Prime Minister Fukuda tends to seek
views on a broad range of areas."


TOKYO 00000331 004 OF 011


Some in the LDP, however, are cool to the premier's approach. A
former cabinet minister made this comment: "The prime minister does
not have close friends who work on his behalf. His idea of forming
councils of private-sector persons symbolizes his solitude." Whether
the councils function or not is up to Fukuda's leadership.

(5) Fierce argument on whether to approve foreign investment in
airport operators: Security vs. growth strategy

ASAHI (Page 2) (Almost full)
February 6, 2008

The Ministry of Land, Infrastructure and Transport (MLIT) plans to
restrict foreign investment in Haneda Airport and Narita Airport
operators. Three cabinet ministers, including State Minister for
Financial Policy Yoshimi Watanabe, yesterday expressed their
opposition to the move. The Ministry of Economy, Trade and Industry
is also urged to reach a decision on whether to approve foreign
investment in leading energy companies. Discussions of which to give
priority -- security that places importance on the public nature of
airports and utility companies, or growth strategy using foreign
investment in Japan -- pursued by the government and the ruling
companies will come to a climax, while receiving attention also from
the stock market.

A joint meeting of the Land and Transportation Division and the
Aviation Measures Special Committee was held at Liberal Democratic
Party (LDP) headquarters. When Land and Transportation Division
Chairman Takashi Mitsubayashi cut the meeting short with the premise
that the LDP would approve the adoption of a regulation restricting
foreign investment, participants against the move pressed
Mitsubayashi and asked him to withdraw the proposal.

Amid angry roars, final decision-making was entrusted to the
division chairmen. However, intraparty procedures, such as securing
approval from the General Council, slated for the same day, were
postponed. In the end, it was decided to hold a division meeting
again on the 6th to obtain understanding from lawmakers opposing the
proposal.

MLIT intends to introduce to the current Diet session a bill
amending the Airport Development Law aimed at adopting a regulation
restricting foreign investment in the operators of Narita Airport
and Haneda Airport.

However, a growing number of LDP members are opposing the move.
Following State Minister for Financial Policy Watanabe, who had
already expressed his opposition, State Minister for Economic and
Fiscal Policy Ota during a cabinet meeting on the morning of Feb. 5
said, "Such a regulation could give the impression that Japan is
closing itself to the outside." State Minister for Regulatory Reform
Kishida also expressed his intention to seek a policy change from
MLIT.

Their opposition to the move is based on the possible negative
impact on inward foreign direct investment. The government plans to
compile a growth strategy in April. One feature of the package is
consolidating the environment for doubling inward foreign direct
investment. The idea is to boost growth of domestic industries,
raising investment funds from all over the world.

Prime Minister Fukuda during the World Economic Forum Annual Meeting

TOKYO 00000331 005 OF 011


(Davos Conference) on Jan. 26 stated, "I will make further efforts
to open the Japanese market, including inward foreign direct
investment." A new regulation restricting foreign investment would
serve as a negative factor for the administration, which is under
fire on economic policy.

The share prices of Japan Airport Terminal Co., the operator of
Haneda Airport, plunged more than 100 yen from the previous day on
the negative reaction to the proposed restriction on foreign
investment. However, when the LDP divisions put off approving
related bills, the stock price rose 100 yen. The price of the stocks
of that company fell more than 40%, compared with the level of late
September last year, before MLIT Minister Fuyushiba announced a plan
that would consider such a possibility.

Foreign investors account for 60% of trading on the Tokyo Stock
Exchange. An official at an institutional investor pointed out that
the adoption of such a regulation would accelerate the move away
from Japan stocks.

Meeting with a backlash, MLIT's bargaining card is security. Its
stance is that foreign investment in airport operators should be
regulated due to security needs, such as the emergency use of
airport facilities. LDP members in favor of giving priority to
security have increased. Chief Cabinet Secretary Machimura also
indicated understanding, noting, "The security issue must be taken
into consideration to a considerable extent.

However, Prime Minister Fukuda on the evening of the same day told
reporters, "I think we will hit on a good idea while pursuing
discussions." He is thus determined to take a wait-and-see
attitude.

MLIT has given up on reaching a decision at a cabinet meeting on the
8th. It will instead aim at doing so on the 12th. A last-ditch
battle between those who aim for growth and those who attach
importance to security will continue.

(6) Discord growing in Fukuda cabinet over foreign ownership of
airports; Judgment left to Kantei

MAINICHI (Page 9) (Slightly abridged)
Evening, February 6, 2008

Discord in the Fukuda cabinet is growing over the Transport
Ministry's plan to limit foreign stakes in airport operations.
Following Financial Services Minister Yoshimi Watanabe, Economic and
Fiscal Policy Minister Hiroko Ota and Regulatory Reform Minister
Fumio Kishida also began to voice opposition to the plan, standing
against Transport Minister Tetsuzo Fuyushiba.

In a joint meeting of the Liberal Democratic Party's Land and
Transport Division and its Special Committee on Aviation on Feb. 5,
one participant shouted: "These proceedings are no good." That
person reacted to the way of proceeding with the meeting by Chairman
Seiichi Ota looking at approving the proposed regulations. It was
decided in the end to put off internal procedures that day.

The Transport Ministry wants to limit the voting rights of foreign
investors to less than one-third in major airport operators, like
the Narita International Airport Corp. by amending the Airport
Development Law. In Britain, where there were no restrictions, a

TOKYO 00000331 006 OF 011


Spanish firm has acquired the operator of Heathrow Airport after it
was privatized. The ministry think that Japan must avoid following
in the footsteps of Britain.

The Macquarie Group, an Australian investment banking group,
acquired last summer more than 19% of the shares in Japan Airport
Terminal Co. (JAT), which operates Haneda Airport. This development
bolstered the ministry's sense of alarm at foreign capital. The
Transport Ministry reiterates the need to place regulations on
foreign capital also from the viewpoint of security.

But Finance Services Minister Watanabe is against the planned
restrictions, citing Prime Minister's pledges in the Davos
Conference in Switzerland last month to do more for Japan to try to
shore up foreign investment in the nation. Many also voice concern
that reports of foreign-ownership restrictions could negatively
affect the stock market. Narita International Airport Corp. has
offered lucrative post-retirement jobs for Transport Ministry
officials. But last June, then Chief Cabinet Secretary Yasuhisa
Shiozaki in the Abe administration took the lead in installing a
person in the private sector to the "reserved seat for retired
Transport Ministry bureaucrats," making him the first president from
the private sector.

But under the Fukuda administration, conflict has been going on over
the structural reform policy introduced by the Koizumi
administration and continued by the Abe administration. Former
Secretary General Hidenao Nakagawa and former Chief Cabinet

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Secretary Kaoru Yosano were at odds over if there is "buried money

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[special reserves]" in the government. Former Internal Affairs
minister Heizo Takenaka has criticized the government and the ruling
camp for their attempt to raise the consumption tax in the future.
Besides, Watanabe also crashed head-on with Transport Minister
Fuyushiba over whether to privatize independent administrative
corporations. Some officials of the Transport Ministry are perplexed
with the ongoing heating discussion on the propriety of the proposed
restrictions on foreign ownership of airports, with one official
grumbled: "The dispute on the proposed restrictions has developed
into a political issue, going beyond just a policy debate." In the
Financial Services Agency, as well, a senior official was overheard
saying: "There will be no other means but to leave a decision in the
hands of the Prime Minister's Office (Kantei)." But asked last night
about if he is ready to hand down a judgment, Fukuda replied: "We
are not in such a situation now."

(7) Monetary cooperation not in sight: What measures will G-7 to be
held in Tokyo on Feb. 9 propose in dealing with subprime mortgage
crisis?

ASAHI (Page 3) (Slightly abridged)
February 6, 2008

The meeting of finance ministers and central bank governors from the
Group of Seven (G-7) industrial power will take place in Tokyo on
Feb. 9. Amid the spillover effect of the subprime mortgage fiasco
casting a pall over the future of the global economy, the focus of
the meeting is whether it can show a path toward stabilizing the
chaotic monetary market. However, with the U.S., and Japan and
European countries wide apart in the situations they are placed,
including economic conditions and their sense of crisis, there is
little room for them to take concerted action.


TOKYO 00000331 007 OF 011


U.S. having its back against wall to stave off recession

The G-7 this time will take place in Tokyo for the first time in
eight years in the run-up for the G-8 summit Japan will hold in
July. Finance Minister Nukaga, who will chair the meeting, showed
his enthusiasm, noting, "We must send a message that will lead to
stabilizing the monetary market and the global economy."

The statement issued after the G-7 in April last year boasted that
the global economy achieved the most powerful, sustainable expansion
in more than 30 years. Unlike last year, the Tokyo G-7 will serve
as a venue for leading countries to share a perception of the crisis
and confer on what measures they can take.

The situation is above all serious in the U.S., the center of the
crisis. Its economy has already lost steam with its growth rate
marking only 0.6% in the October-December quarter last year. There
is concern that housing prices, the symbol of the economic bubble,
could fall to the level of the Great Depression, according to Yale
University Professor Shiller. The U.S. reserves 150 billion dollars
or approximately 16 trillion yen drawn from drawbacks as its fiscal
policy. However, experts' views are divided regarding whether it can
stave off a recession since 2001, when the IT bubble collapsed. If
the U.S. economy, which is serving as the economic engine, loses
steam, it could have a major impact on the global economy. As such,
the present situation is indeed at the critical juncture.

International Monetary Fund (IMF) Managing Director Strauss-Kahn in
late January said that countries that can make financial
disbursements should do so. The U.S. is playing up that it has taken
every possible domestic measure, as one senior White House Official
noted. As such, some take the view that the U.S. would urge
participants of the G-7 to adopt an economic stimulus package.

Japan, EU: Weakened sense of urgency, slow response

However, Japan and European countries are not feeling such a strong
sense of urgency as the U.S. is. That is because European banks have
tentatively recovered from a crisis, during which time they were
unable to procure dollars. The decline of their economy in real
terms is not so pronounced as the decline of the U.S. economy.

European Central Bank President Trichet is determined to give
priority to containing the inflationary trend, saying, "Our compass
has only one hand. That is stabilizing prices." He appears to have
no intention of lowering interest rates. Regarding fiscal
disbursements, too, European Commission President Barroso warned,
"We must not be tempted to resort to a measure of artificially
stimulating the economy."

In Japan, housing investment has dropped. There are also indications
of personal consumption cooling off due to rises in the prices of
products for daily use. However, the government's stance is that
though weakness is observable in some quarters, personal consumption
is recovering, according to State Minister for Economic and Fiscal
Policy Hiroko Ota. Japan's policy interest rate is 0.5%, leaving
little room for a further cut. Making fiscal disbursements is also
difficult with the central and local governments strapped with
combined long-term debts worth nearly 800 trillion yen.

A joint statement to be issued at the Tokyo G-7 is expected to note
as a shared perception that the global economy is slowing. However,

TOKYO 00000331 008 OF 011


it will unlikely to include concerted action in the form of the
invocation of financial and fiscal policies. Feasible measures would
be no more than technical measures, such as how the authority should
regulate the monetary market in order to prevent confusion, as a
senior Finance Ministry official noted.

Another senior Finance Ministry official revealed the distress he is
feeling, saying, "Only expectations of international cooperation are
running alone. We as the chair of the G-7 are agonizing over the
situation."

A point has been made for some time that the expansion of the U.S.
economy could reach a limit. Americans who profited from the housing
bubble have continued to buy goods from newly emerging countries,
such as China, Japan and European countries, while their economy
continued to suffer a current-account deficit, deepening the global
imbalance. Fundamental problems would remain, even if the current
crisis is tided over.

(8) Indonesia certain to reduce the current level of its LNG exports
to Japan to one-fourth in 2010

YOMIURI (Page 9) (Full)
February 6, 2008

Japan imports liquefied natural gas (LNG) from Indonesia, but
Indonesia is certain to drastically cut its exports of LNG to Japan
in 2010. Indonesia's state-run oil company Pertamina and six major
Japanese electric power companies are expected to finalize their
negotiations possibly by the end of the month. LNG is used as
material for electric power plant fuel as well as for utility gas.
On top of the currently soaring oil prices, if LNG imports from
Indonesia, on which Japan depends for 22% of its total LNG imports,
fall sharply, it could lead to hikes in electricity and gas rates.

"2010 problem" for LNG; Shortage of 10 million tons of LNG

Business negotiations between the Indonesian state-run oil company
Pertamina and Japanese firms, including Kansai Electric Power Co.,
will reach the final phase on Feb. 19. The talks are now focusing on
the price of LNG to be exported from the Bongtang LNG plant to
Japan. Exports of LNG from Indonesia to Japan are expected to be
reduced 25% on an annual basis from the current 12 million tons to
an eventual 2-3 million tons.

The reason why Indonesia has made a policy switch that gives more
weight to domestic consumption of energy resources is because of a
general shortage of energy resources and soaring prices worldwide.
Initially, Indonesia intended to halve the current level of its LNG
exports to Japan, but it has now decided to further reduce the
exported amount. By simple calculation, it is estimated that Japan
will suffer a shortfall of 9-10 million tons of LNG annually.

Kansai Electric Power plans to cope with this shortage by importing
LNG from Australia or increasing the volume of imports from the
current LNG suppliers. But development of LNG is now stagnant
worldwide because of the high cost and low profitability from
constructing new LNG plants.

In fact, under the Sakhalin II project, an oil and gas development
project off the coast of Sakhalin in Russia, the initial plan was to
supply LNG to Japan in 2008, but this plan is likely to be delayed

TOKYO 00000331 009 OF 011


until the spring of 2009. Australia's Gorgon project intended to
export 42 million tons of LNG annually to Japan starting in 2010,
but this schedule is most likely to be delayed until 2012 or later.

Concern about rising costs

The government is taking a wait-and-see attitude toward [LNG
negotiations between Japan and Indonesia], with the Ministry of
Economy, Trade and Industry saying that these are between
private-sector firms. In addition, a senior official of the Natural
Resources and Energy Agency said optimistically: "Procurement of LNG
from Qatar and spot purchases of LNG are available." But Qatar is
known for its bullish way of negotiations. Spot purchasing, too, is
very risky because it is affected by market prices.

There are some 100 LNG-based electric power plants across Japan.
Given LNG's good combustion efficiency and its low level of emission
of carbon dioxide, demand for it is expected to grow even higher in
the future.

Meanwhile, the United States and Europe, which have been importing
natural gas mainly in the form of pipelines, are raising their
levels of imports of LNG. China and India are doing the same. A
leading trading house official predicts, "The LNG supply and demand
balance will become tight worldwide around 2010."

Wako University Prof. Koichi Iwama (of natural resources and energy)
noted: "Spot prices are 1.5-2 times higher than long-term contracted
prices, and the price gap is highly likely to expand even more in
the future."

Electric power and gas companies are expecting the government to
back the negotiations, with one company official saying: "We hope
the government will back us in negotiations by means of using
official development assistance so that the negotiations will
proceed in our favor."

Japanese firms bustling about looking for new suppliers

Japanese oil companies and trading houses are continuing their
efforts in various ways to secure energy resources.

Nippon Oil Company during a period from last November to December
acquired oil-drilling rights in three unexplored oil fields in
Southeast Asia, including offshore southern Vietnam. Itochu will
launch a project exploring offshore oil fields in the north of the
United Kingdom.

In last October, Tokyo Gas secured a 5% stake in the drilling rights
over natural gas fields offshore in the west of Australia. Tokyo Gas
is the first company among domestic electric power and gas companies
to take part in such a project from the stage of exploration. Tokyo
Gas Overseas Project Director General Shigeru Hamada said: "It is
significant because it will make it possible for our company as a
development partner to secure gas smoothly."

Meanwhile, natural resources development projects tend to be
affected by the desires of developing countries, as seen n the case
of Sakhalin II project, in which the Japanese side was pressured by
Russia on the pretext of environmental destruction to lower its
investment ratio.


TOKYO 00000331 010 OF 011


Japan is extremely hopeful about the Sakhalin I project, but there
is a possibility that the natural gas will be sold to China. The
road ahead for Japan to secure natural resources remains difficult.

(9) Will Nobuteru Ishihara in Yamasaki faction declare candidacy for
LDP presidential election?

SHUKAN SHINCHO (Page 43 & 44) (Slightly abridged)
February 14, 2008 issue

Seeing public support for the Fukuda cabinet remaining low, some
observers are speculating that the cabinet might be forced to resign
en masse before dissolving the House of Representatives. At such a
time, former Policy Research Council Chairman Nobuteru Ishihara, 50,
who is dubbed as "one of the thoroughbreds" in the Liberal
Democratic Party (LDP) [given his famous father Shintaro], made a
remark that could be taken as a declaration of his candidacy for the
next party presidential election.

Ishihara appeared as a guest in the BS 11 news program "INsideOUT"
on Jan. 31.

Ishihara joined the Yamasaki faction last December after seven years
of belonging to no faction in the LDP. Asked by the moderator why he
had joined the Yamasaki faction, Ishihara replied:

"When I was engaged in drafting the new antiterrorism bill as
chairman of the Policy Research Council, Mr. Yamazaki, who was
serving as chairman of the panel responsible for the legislation
work at that time, invited me to join his faction. I asked, 'Why are
you inviting me?' He replied: 'I just have a gut feeling about you.'
I think we share the same kind of spirit."

When the moderator touched on the next LDP presidential election,
Ishihara made the following remark:

"I know Mr. Yamasaki's mind very well, but I have yet to establish
good contacts inside the faction. Even so, if some were to call on
me to run in the presidential race, I would like to establish firm
personal relations and make efforts to respond to such calls."

This is a considerably bold statement for Ishihara, who has given
the image of being an irresolute man.

A deskman of a certain political department commented:

"It was the first time for Mr. Ishihara to refer to the possibility
of putting himself forward as a candidate for the LDP presidential
race. ... He is eager to run in the next presidential election. I
think it was a declaration of candidacy in effect. Mr. Ishihara used
to be a member of the group led by former Prime Minister Abe. Mr.
Abe dislikes Mr. Yamasaki. Despite that, he joined the Yamasaki
faction, probably showing his eagerness to file his candidacy for
the presidential election."

In the Yamasaki faction, there is no influential successor to
Yamasaki. Given this, Yamasaki reportedly invited Ishihara to join
his party, while also keeping in mind the possibility of fielding
him as a candidate for the presidency.

An LDP member said: "Since he has been regarded as a candidate for
the next presidency, he has put his minds to it." The member added:

TOKYO 00000331 011 OF 011


"In a TV program the other day, one commentator called Ishihara the
third candidate, following Aso and Tanigaki. When I told that to Mr.
Ishihara, he grinned broadly, saying, 'No way'."

Ishihara ran about in confusion over the challenge of reforming
road-related public corporations. He accomplished no remarkable
achievements as deputy secretary general or Policy Research Council
chairman in the Abe administration. We think he has yet to have
enough capacity as a politician, but one LDP lawmaker said:

"Former House of Councillors Chairman Mikio Aoki has highly
evaluated Mr. Ishihara. I think it is fully possible that Mr.
Ishihara will run in the next presidential race. Mr. Ishihara in
the LDP is seen as a captivating person to the elderly members. In
the earlier Upper House election, he went to Shimane Prefecture to
make campaign speeches three times in response to Mr. Aoki's
request, cancelling planned speeches. Many veteran members call him
a nice young man."

Ishihara has earnestly attended faction meetings and study meetings.
He has also dined with faction members, in an attempt to forge a
solid footing in the faction.

A Yamasaki faction member said: "It is impossible for Yamasaki to
run in the presidential race, because he has been tainted with a
scandal involving a woman. Economy, Trade and Industry Minister
Amari, who is aiming to succeed Yamasaki, will support Aso. Under
such a situation, it is fully conceivable that our faction will back
Ishihara."

DONOVAN

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