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Cablegate: Japanese Morning Press Highlights 03/04/08

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UNCLAS SECTION 01 OF 11 TOKYO 000567

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 03/04/08

Index:

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

4) Asahi poll: Cabinet support rate slips 3 points to 32 PERCENT ,
non-support rate up 4 points to 50 PERCENT ; Majority of public
wants Defense Minister Ishiba to stay at post (Asahi)

Defense affairs:
5) Another MSDF destroyer has accident, bumping into moored ship in
Vietnam port (Asahi)
6) Has the Defense Ministry's nature changed? Reform council meets
in order to probe such issues (Mainichi)
7) USFJ to ease Okinawa, Iwakuni ban on leaving base but a curfew
after 10 pm will remain (Asahi)

8) Possibility of visit to Japan of China's President Hu may be
postponed due to simmering poison-dumpling issue (Mainichi)

New Russian president-elect Medvedev:
9) Prime Minister Fukuda may seek an early meeting with new Russian
president, with an eye on Putin still being a powerful influence
(Tokyo Shimbun)
10) Japan searching for breakthrough on the northern territorial
issue with the election of a new Russian president (Asahi)

11) Japan Coast Guard investigating and may file charges against
U.S. environmental group who threw acid at whalers at sea, injuring
three (Sankei)

Political agenda:
12) Democratic Party of Japan (DPJ) and two other opposition parties
boycotting Diet sessions this week (Yomiuri)
13) Diet stalls over fiscal 2008 budget and tax bills, now in the
Upper House (Mainichi)
14) No solution in sight as ruling and opposition battle over Bank
of Japan governorship (Asahi)

Articles:

1) TOP HEADLINES

Asahi:
In poll, 59 PERCENT favor reallocating road tax revenues for
general expenditures

Mainichi:
Government to study emissions trading, reflecting prime minister's
resolve to take initiative on climate change

Yomiuri:
Police to arrest dozen persons over land sharking

Nikkei:
Pioneer to stop plasma panel production, instead to specialize in
assembling TVs

Sankei:
Japan Coast Guard looking to prosecute violent activities by
antiwhaling group as criminal case for first time

TOKYO 00000567 002 OF 011

Tokyo Shimbun:
Road tax revenues used for entertainment equipment, including
karaoke machines, on pretext of deepening friendship

Akahata:
Local government gathering signatures to call for withdrawing
medical system for very old people

2) EDITORIALS

Asahi:
(1) Low public support: No hopes for Fukuda cabinet without
reforming road-construction policy
(2) Russian president: Establishment of dual-power structure
troubling

Mainichi:
(1) Putin laughing merrily again
(2) Changes in industrialized countries' economies: Japan first
should take measures to boost personal consumption

Yomiuri:
(1) Ruling and opposition camps urged to engage in discussion to
stabilize currency, stock markets
(2) Prime minister's visit to Russia necessary to ascertain new
Russian government's policy toward Japan

Nikkei:
(1) Selection of new BOJ government urged
(2) Russia opts for dual power structure

Sankei:
(1) Promote study of loess from Gobi Desert in cooperation with
other countries
(2) New Russian president expected to chart own diplomatic policy

Tokyo Shimbun:
(1) We hope new Russian government will establish fair society
(2) Illegal activities by antiwhaling group impermissible

Akahata:
(1) Fulfill responsibility for containing global warming in a
resolute manner

3) Prime Minister's Official Residence (Kantei)

Prime Minister's schedule, March 3

NIKKEI (Page 2) (Full)
March 4, 2008

10:02
Met with Environment Minister Kamoshita, Deputy Assistant Chief
Cabinet Secretary Saka, and Special Advisor to Cabinet Okuda at
Kantei.

10:59
Met with Tomonashi Maruyama, winner of the Speech Contest among
Senior High School Students on Northern Territories Issue, and
others. Afterwards, met with Chief Cabinet Secretary Machimura and
Deputy Chief Cabinet Secretary Futahashi.

TOKYO 00000567 003 OF 011

12:11
Met with Saka, and two other deputy assistant chief cabinet
secretaries, Ando and Yanagisawa.

SIPDIS

13:05
Met with Futahashi and Office for Regional Revitalization Chief
Yamamoto.

14:30
Met with State Minister in Charge of Science and Technology Kishida,
Saka, Cabinet Office Vice Minister Uchida, Masuo Aizawa and Taizo
Yakushiji, members of the Council for Science and Technology Policy.
Afterwards, met with Administrative Vice Foreign Minister Yabunaka.

15:32
Met with Prime Ministerial Advisor Ito.

16:05
Met with Uchida and Decoration Bureau Director-General Fukushita.
Afterwards, met with House of Representatives member Kazuo Aichi,
and House of Councilors member Jiro Aichi. After them, met with
Cabinet Intelligence Director Mitani.

17:01
Attended an LDP executive meeting held in Diet.

17:30
Attended a meeting for reform of the Ministry of Defense held at
Kantei.

19:20
Met with National Defense Academy President Iokibe and
Administrative Vice Defense Minister Sato at Kantei residence.

4) Poll: 59 PERCENT back using road-related tax revenues for other
purposes; Cabinet support flat at 32 PERCENT , nonsupport reaches 50
PERCENT

ASAHI (Top play) (Abridged)
March 4, 2008

The Diet, in its current ordinary session, is focusing its debate on
what to do about gasoline taxes and other road-related tax revenues
that are currently limited to road construction and other
road-related infrastructure projects. The Asahi Shimbun conducted a
telephone-based nationwide public opinion survey on March 1-2, in
which respondents were asked if they were in favor of incorporating
the road-related tax revenues into the general account. In response,
59 PERCENT answered "yes," with 30 PERCENT saying "no." The Fukuda
cabinet's support rate was 32 PERCENT (35 PERCENT in the last
survey taken in February). The support rate has been remaining low
since it hit 31 PERCENT in mid-December last year. The nonsupport
rate for the Fukuda cabinet reached 50 PERCENT for the first time
(46 PERCENT in the last survey).

In a previous survey taken in early December last year, 46 PERCENT
were in favor of incorporating the road-related tax revenues into
the general account. Their proportion rose to 54 PERCENT in the
February survey and further increased in the latest survey. Even
among those who support the ruling Liberal Democratic Party, 58
PERCENT answered "yes." The survey shows the public's growing

TOKYO 00000567 004 OF 011


support for using road-related tax revenues for other purposes.

In the survey this time, respondents were also asked if they thought
Defense Minister Ishiba should resign to take responsibility for the
recent collision of a Maritime Self-Defense Force destroyer with a
fishing boat that has left its two fishermen missing. To this
question, 34 PERCENT answered "yes," with 57 PERCENT saying "no."

Meanwhile, Prime Minister Fukuda has vowed to overhaul the Defense
Ministry. Respondents were asked if they expected him to display
leadership. In response, "yes" accounted for 32 PERCENT , and "no"
at 60 PERCENT .

In the breakdown of public support for political parties, the LDP
stood at 29 PERCENT (30 PERCENT in the last survey). The leading
opposition Democratic Party of Japan (Minshuto) was at 21 PERCENT
(24 PERCENT in the last survey).

5) MSDF destroyer collides with freighter in Vietnam port

ASAHI (Page 1) (Abridged)
March 4, 2008

The Maritime Self-Defense Force's destroyer Hamayuki had a minor
collision with the Cambodian-registered freighter Masan in the
southern Vietnamese port of Ho Chi Minh at around 10:20 a.m.
yesterday (12:20 p.m. Japan time). The Hamayuki was dented at the
stern, and its flagpole at the stern was bent. Some paint on the
freighter was scraped. No one was injured in the collision.

Prime Minister Fukuda told reporters yesterday evening, "I want them
to alertly carry out their duties." The MSDF Maritime Staff Office
commented: "There was another incident right after the Aegis
accident. We take this fact seriously. We have asked local
authorities to help berth the ship. However, the captain is in
charge of overseeing pilots. We want to take preventive steps."

6) Prime Minister Fukuda asks advisory panel to come up with
proposals for Defense Ministry reform, move to put cap on criticism

MAINICHI (Page 2) (Full)
March 4, 2008

The government's Council on Reform of the Defense Ministry, chaired
by Naoya Minami, advisor to Tokyo Electric Power Co., yesterday held
a meeting at the Prime Minister's Office (Kantei) to discuss
responses by the Defense Ministry to the collision of the Maritime
Self-Defense Force Aegis destroyer Atago and a small fishing boat.
At the outset of the meeting, Prime Minister Yasuo Fukuda called on
the panel to reflect the repentance for the collision in reform of
the ministry. He stated: "The extremely regrettable accident
occurred. I want you to come up with proposals for a new structure
of the Defense Ministry and the Self-Defense Forces (SDF) that the
public can trust."

It was the first time for Fukuda to attend a meeting until the end
of the session. The delay in communication of the collision to the
Prime Minister and Defense Minister Shigeru Ishiba came under
criticism. The ministry's explanations were also confused. Voices
questioning his leadership as the supreme commander of the SDF began
to crop up. Therefore, Fukuda appeared to have started dousing
flames around him.

TOKYO 00000567 005 OF 011

In yesterday's meeting, the panel discussed how civilian control
should be consistent based the collision. One participant said: "It
is necessary to strengthen the commanding function of the Kantei."
Another member criticized the accident, saying: "They have not
learned from the past incidents." The panel is expected to discuss
measures to make clear the purchase of defense equipment in the next
meeting.

7) USFJ eases lockdown in Okinawa, Iwakuni

ASAHI (Page 34) (Full)
March 4, 2008

U.S. Forces Japan decided yesterday evening to partially call off
its ongoing lockdown of bases in Okinawa and Iwakuni, Yamaguchi
Prefecture, and change it to a nightly curfew from 10 p.m. through 5
a.m. USFJ has locked down its bases in Okinawa and Iwakuni since
Feb. 20 to bar U.S. military personnel and civilian employees from
going out in the wake of an Okinawa-based U.S. Marine's alleged rape
of a local junior high school girl. The Marine was recently released
as prosecutors have now decided to drop the case. Meanwhile, the
U.S. military is continuing its investigation into the case. The
nightly curfew has been enforced for the Army, Navy, Air Force, and
Marine Corps since yesterday evening.

USFJ will continue its no-drinking action. However, off-base U.S.
military personnel are allowed to drink only at their homes.
Civilian employees and family members are also prohibited from going
out and drink outside bases. This action will be called off.

U.S. military personnel's off-base activities have been minimized to
workplaces, medical facilities, and some other limited areas. USFJ
leadership will decide after a while on whether to call off the
curfew and drinking prohibition.

8) Option of postponing Hu's visit to Japan crops up in government
due to dumpling incident

MAINICHI (Page 2) (Abridged slightly)
March 4, 2008

Some in the Japanese government have begun voicing the need to make
rearrangements for the timetable for Chinese President Hu Jintao's
planned visit to Japan while bearing in mind the possibility that it
will be postponed from "around cherry-blossom time" in April, as
originally scheduled, to mid-May or later. Such a development is
connected with the Foreign Ministry's intention to settle the
conflict between Chinese and Japanese investigative and public
security authorities over where a pesticide has gotten mixed into
gyoza dumplings made in China by confirming food safety. There are
growing calls in the government, including aides to the prime
minister, for reexamination, saying the cause must be determined
first.

When Chinese State Councilor Tang Jiaxuan visited Japan on February
20, he sounded out the government on a plan for President Hu to make
a four-day visit to Japan stating on April 20. Based on this, Japan
has been studying such events as a summit meeting, an audience with
the Emperor, and a speech at the University of Tokyo.

Then a situation arose in which Japan and China locked horns over

TOKYO 00000567 006 OF 011


the results of a scientific test for the pesticide detected in the
dumplings. Japan's National Police Agency reacted strongly to
China's announcement. High-level officials at the Prime Minister's
Office also sided with the NPA, saying: "It is meaningless to
establish a Japan-China consultative organ when the cause is not
determined."

As a result, China's General Administration of Quality, Supervision,
Inspection and Quarantine Director Li Changjiang's visit to Japan,
scheduled for March 2, has also been postponed. Li was scheduled to
hold a meeting with Health, Labor, and Welfare Minister Yoichi
Masuzoe and confirm "food safety" and declare closer cooperation
between the two countries.

The Foreign Ministry might have to reschedule for a Fukuda-Hu summit
meeting. As for the prime minister's timetable after April 20, South
Korean President Lee Myung Bak is scheduled to visit Japan on his
way back from the United States. The prime minister is also
considering visiting European countries and Russia from the Golden
Week holiday period from late April through early May. Once Hu's
visit is postponed, it might have to be put off until mid-May or
later.

Prime Minister Fukuda is expected to invite President Hu to the Lake
Toya G8 Summit in July. There are concerns that China might postpone
Hu's visit to Japan in spring, saying that it is too close to the G8
summit.

9) Japan hopeful of breakthrough in stalled talks on Northern
Territories; Fukuda considering visiting Russia as soon as possible

TOKYO SHIMBUN (Page 2) (Full)
March 4, 2008

Yuji Nishikawa

In the Russian presidential election, First Deputy Prime Minister
Medvedov secured an overwhelming victory. Referring to this election
result, the Japanese government has noted that there will be no
significant shift in Russia's policy toward Japan with Chief Cabinet
Secretary Nobutaka Machimura saying, "The new president is likely to

SIPDIS
follow President Putin's foreign policy." Meanwhile, because
President Putin has indicated that he, as "prime minister," will
continue to address the Northern Territories issue, a major
outstanding issue lying between Japan and Russia, Tokyo has
expectations that the stalled talks on the Northern Territories, a
major outstanding issue lying between Japan and Russia, will be
resolved.

Late yesterday Prime Minister Yasuo Fukuda said, "I don't think
there will be any change in Japan-Russia relations. I will strive to
resolve the major pending issue. I hope the new (Russian) president
will have a frank discussion with us."

With President Putin certain to assume the post of prime minister, a
senior Foreign Ministry official noted, "It will take some time to
see" how Putin and President-Elect Mededov will share the role.
Tokyo thinks that as a "new prime minister," Putin will retain his
strong clout on the diplomatic front, as well.

In the days of the Putin administration, economic ties between Japan
and Russia have been strengthened, but the Northern Territories

TOKYO 00000567 007 OF 011


issue made no headway. The Japanese government's fundamental
position about the issue is that the four disputed northern islands
be returned in a package. Tokyo has not budged even an inch from
this position.

President Putin has indicated that as a prime minister, he will
address the Northern Territories issue. In response to this, Fukuda
sent Putin a personal letter saying that "I hope to put Japan-Russia
ties on a higher level" via former Prime Minister Yoshiro Mori in
last December, when Mori was visiting Russia.

Fukuda plans to travel European countries during the Golden Week
holidays in May in order to ask for their cooperation on the
upcoming Group of Eight Hokkaido Toyako Summit in July. Fukuda is
considering visiting Russia as part of this tour. By building
personal ties with Putin and Medvedov, Fukuda wants to find a clue
to resolving the Northern Territories issue.

10) Following Medvedev's victory in Russian presidential election,
Japan exploring ways to move Northern Territorial issue forward

ASAHI (Page 2) (Full)
March 4, 2008

"There is a major issue pending between Japan and Russia. We will
make utmost efforts to improve the situation. I expect the new
president will hold frank talks with Japan."

Following Dmitry Medvedev's landslide victory in the presidential
election in Russia, Prime Minister Fukuda indicated his desire to
find an opening for moving forward negotiations on a territorial
dispute over four Russian-held islands off Hokkaido. Based on the
view that Vladimir Putin will continue to play a key role in working
out policy toward Japan, including the territorial row, the Japanese
government intends to ascertain how Putin and Medvedev will share
roles.

The government has started coordination on a visit to Russia by
Fukuda during the May Golden Week Holiday to meet outgoing Putin. If
there is an offer from Russia, the government will also look into
having a highest-level official attend the presidential inaugural
scheduled for May, according to informed sources. A senior Foreign
Ministry official said that if the prime minister visits Russia
prior to the Lake Toya Summit, he may be able to meet both outgoing
and incoming presidents."

When former Prime Minister Mori handed a personal letter from Fukuda
over to Putin during his visit to Russia last December, Putin
commented on the Northern Territorial issue: "I believe we will be
able to find a solution acceptable for both sides. I want you to
relay to Prime Minister Fukuda my message that I truly want to
resolve the issue." He then expressed his view that there will be no
change in the relationship between Russia and Japan after the change
of government. Later, Putin sent to Japan a letter noting that he
agreed to promoting Russian-Japan relations, including negotiations
on the territorial issue, to a higher level.

No progress was made in negotiations on the territorial issue under
the Koizumi and Abe governments. Given this, the Japanese government
has interpreted such recent moves by Russia as an expression of its
eagerness to settle the issue. A senior Foreign Ministry official
said: "We would like to produce some positive results in the

TOKYO 00000567 008 OF 011


atmosphere that we have finally regained after many years." Even so,
the gap in both sides' views over the Northern Territorial issue
remains wide.

In a speech in Tokyo in February, Russian Ambassador to Japan
Mikhail Bely said: "I think Mr. Medvedev's first overseas trip as
president will be a trip to Japan for the Lake Toya Summit,"
indicating that Hokkaido will be the stage for the new Russian
president to make a diplomatic debut. Keeping Medvedev's little
diplomatic experience in mind, many government officials think that
Japan's negotiating partner may be Putin for the time being.

11) U.S. environmental group again obstructs research whaling: JCG
for first time builds case for investigation; Three injured,
including maritime safety officials

SANKEI (Top Play) (Excerpts)
March 4, 2008

People aboard a ship belonging to Sea Shepherd, a U.S. environmental
group, threw bottles containing chemicals at the Nisshin Maru, the
mother ship of a fleet of research whaling vessels in the Southern
Ocean, injuring three persons. Taking the incident seriously, the
Japan Coast Guard (JCG) the same day started an investigation on
suspicion of Sea Shepherd obstructing business by force and assault.
This is the first investigation by the JCG into interference with
Japan's research whaling.

According to the JCG, the Nisshin Maru's operation was obstructed
with bottles containing butyric acid giving out a foul smell and
bags with white powder, with more than 100 objects thrown from the
protest ship for about an hour.

During the incident, two JCG guards aboard the Nisshin Maru and one
crew member were slightly injured, as they got butyric acid in their
eyes. The ingredients of the white powder are not known.

The JCG has launched an investigation, because maritime safety
officials with the right to investigate maritime crimes witnessed
the incident on the spot and they themselves were injured.

The JCG will seek to identify the perpetrators, using a videotape
that captured them throwing bottles onto the deck. As soon as the
suspects are identified, the JCG intends to ask for investigative
cooperation from the relevant country through a diplomatic channel.

This is the third time for Sea Shepherd to obstruct Japan's research
whaling in the Southern Ocean. Since maritime safety officials were
not aboard the ships in the past two incidents, the JCG had been
unable to launch an investigation.

12) DPJ to boycott Diet deliberations slated for this week both in
Lower and Upper Houses

YOMIURI (Page 2) (Full)
March 4, 2008

Democratic Party of Japan (DPJ or Minshuto) President Ozawa and
Secretary General Hatoyama yesterday held a meeting yesterday in the

SIPDIS
Diet and confirmed not to attend deliberations in both the Lower and
Upper Houses at least this week. They are objecting strongly to the
ruling parties for having approved the fiscal 2008 budget bill and

TOKYO 00000567 009 OF 011


tax system-related bills by the Lower House, while opposition
parties abstained from a roll call. Regarding talks to revise the
bill amending the Special Tax Measures Law, including the
maintaining of the provisional gasoline tax rate, they decided to
look into that possibility when the ruling parties present revised
proposals.

Then, secretaries general of the DPJ, the Social Democratic Party
(SDP) and the People's New Party (PNP) met in the Diet and shared
the view that the proposal made by the Lower House speaker and the
Upper House president that a certain level of a conclusion be
reached before the end of the year has fallen apart. They confirmed
to act in unity in dealing with the immediate Diet session,
including boycotting Diet deliberations.

DPJ Secretary General Hatoyama told reporters, "The ruling parties
need to offer an unequivocal apology for abandoning the mediation
proposal made by the speaker of the Lower House and the president of
the Upper House." He thus indicated his party's stance that an
apology by the ruling parties will be one condition for the
opposition camp to respond to a call for attending Diet
deliberations.

In the meantime, the Upper House Budget Committee yesterday held a
meeting of directors of the ruling parties and decided by virtue of
Chairman Yoshitada Konoike's office to hold a basic
question-and-answer session with Prime Minister Fukuda and others in
attendance. However, since the DPJ and other opposition parties,
which have a majority of seats in the Budget Committee, intend to
abstain from the session, the planned meeting will unlikely be held
with the number of participants falling short of the quorum. The
Lower House Land, Infrastructure and Transport Committee at a
round-table meeting of directors put off a committee meeting slated
for the 4th.

13) Diet stalled as opposition decides to boycott deliberations for
one week

MAINICHI (Page 2) (Full)
March 4, 2008

The Diet was stalled yesterday as it was unable to launch
deliberations on the fiscal 2008 budget bill, which is now before
the opposition-controlled House of Councillors. The opposition camp
reacted negatively to the ruling parties, contending that the ruling
coalition unilaterally passed the budget bill in the House of
Representatives. A senior member of the main opposition Democratic
Party of Japan (DPJ or Minshuto) said: "Since the ruling camp took a
forced vote, we won't be able to join deliberations for a week." The
opposition bloc has stressed that the ruling coalition ignored the
mediation effort by the leaders of the two Diet houses, under which
the two sides reached an agreement to reach a conclusion by the end
of this fiscal year on the budget bill, as well as on a bill
revising the Special Taxation Measures Law, including measures to
retain the current provisional gasoline tax. As such, the opposition
has toughened its hard-line stance. There is no prospect for the
convocation of deliberations in the Upper House.

In a meeting yesterday of directors of the Upper House Budget
Committee, the ruling camp proposed convening deliberations on the
FY2008 budget today. The opposition, however, turned down the
proposal. Therefore, the discussion did not go anywhere. And a

TOKYO 00000567 010 OF 011


meeting between ruling Liberal Democratic Party Diet Affairs
Committee Chairman Seiji Suzuki and his DPJ counterpart Susumu
Yanase ended in failure, as well.

The secretaries general of the DPJ, the Social Democratic Party, and
the People's New Party held a meeting in the Diet building. The
three shared the perception that the agreement reached by the ruling
and opposition camps through the good offices of the leaders of two
Diet chambers was scrapped. They also affirmed that the three
opposition parties would boycott a meeting to be held today in
virtue of the authority of Upper House Budget Committee Chairman
Yoshitada Konoike.

The DPJ has already submitted to the Diet its own bills on the
integration of the special account of road-related taxes into the
general account and on the abolition of the provisional tax rates,
as counterproposals toward a revision of the government-drafted
bills. The largest opposition party intends to urge the ruling
coalition to carry out deliberations on its own bills before
deliberating on the government's bills, hoping to assume the
initiative in the Upper House.

The ruling camp, however, is alarmed that a prolonged stalemate in
the Diet and a delay in consultations on a review of the government
bills would give the opposition an excuse to not take a vote on the
bills. The ruling parties have begun making efforts to have the
opposition join consultations. However since there are big
differences between the bills of the government and the DPJ, a
senior LDP Upper House member indicated yesterday a negative view
about a drastic review of the government bills.

14) Nomination of BOJ governor: Calls for Muto's promotion still
strong in government, ruling bloc

ASAHI (Page 4) (Excerpts)
March 4, 2008

The bargaining between the government and ruling coalition and the
opposition camp over the appointment of the new Bank of Japan
governor has now taken on an aspect of a game of "chicken." Reacting
strongly to the ruling bloc, which has rammed the budget and
budget-related bills through the Lower House, the major opposition
Democratic Party of Japan (DPJ) has decided that in the event the
government and ruling camp present a plan to promote BOJ Deputy
Governor Toshiro to the governor's post, it will not give its
consent. Meanwhile, in the government and ruling bloc, the view is
still predominant to nominate Muto. BOJ Governor Toshihiko Fukui's
term of office will expire in a little over two weeks. No exit is in
sight for the selection of a new BOJ governor.

LDP Secretary General Bunmei Muto made a speech in Kobe on March 1,
the day after the Lower House approved the budget related bills. In
it, Ibuki applied pressure on the DPJ by citing Muto, saying: "The
DPJ is saying that because the LDP did what the DPJ did not agree
to, they will not endorse Mr. Muto. The logic is absurd."

A senior LDP member also said: "We should take the proper approach
without worrying about the DPJ." A government official commented, "I
think the prime minister has made up his mind." There are strong
calls in the government and ruling bloc that the policy to promote
Muto should not be changed.


TOKYO 00000567 011 OF 011


The government and ruling bloc are enamored with the idea of
promoting Muto because he truly understands financial affairs and
can also go along with the government's policy, according to a
government source. An aide to the prime minister also said: "It's
not a position just for anyone. There are no other good
candidates."

Since he became deputy governor in 2003, Muto has been regarded as a
shoo-in for the BOJ governorship. The government's five-year plan
will fall through with a collapse of its scenario to appoint Muto.

Further, the government and ruling camp fear that if they agree to
the DPJ's call for replacing Muto with a new candidate, that will
take a heavy toll on the prime minister's grip on power in the
government and the party.

SCHIEFFER

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New Zealand has congratulated the Iraqi government on the successful liberation of Mosul from ISIS after a long and hard-fought campaign. More>>

Gordon Campbell: On The Current US Moves Against North Korea

If Martians visited early last week, they’d probably be scratching their heads as to why North Korea was being treated as a potential trigger for global conflict... More>>

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Gordon Campbell: On The Lessons From Corbyn’s Campaign

Leaving partisan politics aside – and ignoring Jeremy Corbyn’s sensational election campaign for a moment – it has to be said that Britain is now really up shit creek... More>>

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Another US Court: Fourth Circuit Rules Muslim Ban Discriminatory

ACLU: Step by step, point by point, the court laid out what has been clear from the start: The president promised to ban Muslims from the United States, and his executive orders are an attempt to do just that. More>>

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