Cablegate: Daily Summary of Japanese Press 04/17/08

DE RUEHKO #1061/01 1080811
P 170811Z APR 08





E.O. 12958: N/A



(1) Poll on Fukuda cabinet, political parties, gas tax, BOJ chief
nomination, pension fiasco (Yomiuri)

(2) Look at Fukuda administration ahead of G-8 Toyako Summit:
Discrepancies now prominent between Japan, U.S. (Yomiuri)

(3) U.S. forces in Japan in violation of Japan-U.S. agreement with
two sons of U.S. military personnel suspected of shoplifting taken
by U.S. military police to U.S. base (Asahi)

(4) Foreign Minister Koumura: U.S. military police officers' action
"considerably problematic," indicating possible protest against U.S.
action (Okinawa Times)

(5) I feel discomfort at U.S. consul general's remark; For what
purpose is training in Okinawa carried out? (Okinawa Times)

(6) Government turns down TCI's application for raising stake in
J-Power, issuing first-ever advisory notice: British fund announces
plan to keep company's shares (Nikkei)

(7) Cabinet Office poll: More people pessimistic about prices, food
(Tokyo Shimbun)

(8) Gov't welcomes U.S. CO2 emission target (Asahi)


(1) Poll on Fukuda cabinet, political parties, gas tax, BOJ chief
nomination, pension fiasco

YOMIURI (Page 11) (Full)
April 15, 2008

Questions & Answers
(Figures shown in percentage. Parentheses denote the results of a
survey taken in March.)

Q: Do you support the Fukuda cabinet?

Yes 30.0 (33.9)
No 58.4 (54.0)
Other answers (O/A) 2.9 (2.6)
No answer (N/A) 8.7 (9.5)

Q: (Only for those who answered "no" to the foregoing question) Give
up to two reasons for your disapproval of the Fukuda cabinet.

I can't appreciate its political stance 46.2 (47.8)
It's unstable 34.8 (26.8)
The prime minister is untrustworthy 24.9 (23.4)
Nothing can be expected of its economic policy 35.6 (37.9)
Nothing can be expected of its foreign policy 6.8 (8.6)
Because it's a coalition of the Liberal Democratic Party and New
Komeito 8.6 (8.8)
Because the prime minister is from the LDP 2.7 (4.9)
It's worse than its predecessors 9.8 (8.1)
O/A+N/A 4.2 (3.0)

TOKYO 00001061 002 OF 009

Q: Which political party do you support now? Pick only one.
Liberal Democratic Party (LDP) 30.6 (33.1)
Democratic Party of Japan (DPJ or Minshuto) 17.4 (17.6)
New Komeito (NK) 2.6 (2.7)
Japanese Communist Party (JCP) 1.7 (2.5)
Social Democratic Party (SDP or Shaminto) 0.5 (1.1)
People's New Party (PNP or Kokumin Shinto) 0.2 (0.3)
New Party Nippon (NPN or Shinto Nippon) 0.2 (0.1)
Other political parties --- (---)
None 46.0 (41.9)
N/A 0.9 (0.7)

Q: Prime Minister Fukuda has proposed incorporating road-related tax
revenues into the state's general account from next fiscal year.
Democratic Party of Japan (Minshuto) President Ozawa rejected the
proposal, insisting on incorporating the road tax revenues into the
general account from the current fiscal year and abolishing the rate
of provisional taxation on gasoline.

Do you think Prime Minister Fukuda displayed leadership?

Yes 6.6
Yes to a certain degree 16.5
No to a certain degree 28.1
No 44.0
N/A 4.8

What do you think about DPJ President Ozawa's response?

Appreciate very much 7.1
Appreciate somewhat 26.0
Don't appreciate very much 35.8
Don't appreciate at all 26.6

Q: The government and ruling parties plan to restore the rate of
provisional taxation on gasoline in late April. Do you support this

Yes 29.5
No 60.8
N/A 9.7

Q: Do you support the idea of incorporating road-related tax
revenues into the state's general account?

Yes 62.8
No 26.7
N/A 10.5

Q: What do you think should be done about the rate of provisional
taxation on gasoline?

Continue the rate of provisional taxation for road construction and
other road-related infrastructure projects 8.7
Continue the rate of provisional taxation for wide-ranging purposes
Abolish the rate of provisional taxation 40.2
O/A 1.5
N/A 7.6

Q: The post of governor at the Bank of Japan was left vacant for a
while. Which side do you think is more to blame?

TOKYO 00001061 003 OF 009

Government, ruling parties 24.8
Opposition parties 25.4
Both sides are about the same 43.7
N/A 6.0

Q: In the pension fiasco, the government could not identify about 50
million pension accounts due to its record-keeping flaws. The
government identified about 10 million pension accounts by the end
of March. What do you think about this?

Appreciate very much 5.0
Appreciate somewhat 29.9
Don't appreciate very much 31.5
Don't appreciate at all 31.2
N/A 2.3

Q: The DPJ is calling for Health, Labor and Welfare Minister Masuzoe
to take responsibility for the pension fiasco. Do you think he
should resign?

Yes 11.8
No 84.1
N/A 4.1

Q: What kind of government would you like to see now? Pick only

The current LDP-Komeito coalition government 19.5
A DPJ-led coalition government of opposition parties 16.4
The LDP's single-party government 6.7
The DPJ's single-party government 4.3
A coalition government centering on the LDP and the DPJ 19.2
A government under a new framework of political parties after
realigning the ruling and opposition parties 18.4
O/A 0.8
N/A 14.6

Polling methodology
Date of survey: Apr. 12-13.
Subjects of survey: 3,000 persons chosen from among all eligible
voters throughout the country (at 250 locations on a stratified
two-stage random sampling basis).
Method of implementation: Door-to-door visits for face-to-face
Number of valid respondents: 1,753 persons (58.4 PERCENT ).

(2) Look at Fukuda administration ahead of G-8 Toyako Summit:
Discrepancies now prominent between Japan, U.S.

YOMIURI (Page 4) (Full)
April 17, 2008

Rift between Japan, U.S. over North Korea

Vice Foreign Minister Mitoji Yabunaka had a one-and-a-half-hour
luncheon in Washington on April 9 with United States Deputy
Secretary of State John Negroponte. This visit to the U.S. was

Yabunaka's first since taking office as vice minister.

Both officials confirmed that the Japan-U.S. alliance plays a very
important role not only for the bilateral relationship but also for

TOKYO 00001061 004 OF 009

stability in the Asia-Pacific region.

Meanwhile, in Beijing, however, the Ministry of Foreign Affairs'
(MOFA) Asian and Oceanian Affairs Bureau Director-General Akitaka
Saiki squabbled with U.S. Assistant Secretary of State Christopher
Hill over discussions between the U.S. and North Korea. Hill, the
U.S. chief delegate to the six-party talks, takes the delisting of
North Korea as a state sponsor of terrorism as a strong diplomatic
card for the U.S. But Japan can't allow the U.S. to move in that
direction without any progress on the abduction issue.

Saiki and Hill ended discussion without reaching any agreement,
revealing subtle differences. Saiki told reporters, "Steps to follow
before (North Korea's declaration of its nuclear programs) still
remain." In contrast, Hill noted, "There are things to be done in a
couple of days. Once they are completed, we will have a clear
outlook for the multilateral talks," implying that the six-party
talks will make headway.

Two days later, the Washington Post reported that the U.S. is
gearing up to remove North Korea from the list of state sponsors of

Good bilateral relationship now being eroded

Similar discrepancies have recently been seen in relations between
Japan and the U.S. For instance, one emerged in late February and it
has kept the Japanese government skeptical about the U.S. even now.

It arose when Prime Minister Fukuda met with visiting Israeli Prime
Minister Olmert. In the session, Olmert touched on an Israeli
air-raid against a Syrian military facility last September and
revealed to Fukuda: "It was a nuclear facility that received
technical assistance from North Korea." This information was
supposed to be classified.

Aside from whether the information was authentic, it was likely
available to the U.S. at an early stage, but there was no report on
it from the U.S. to Japan immediately after the facility was bombed.
A senior MOFA official murmured: "Why wasn't the information given
to Japan? This case is serious. The reason may be attributable to
the leak of the classified data on the Aegis system."

In the meantime, the U.S. side has been increasingly frustrated with
the current state of Japan. Because of the divided Diet, Japan
temporarily suspended its Maritime Self-Defense Force's (MSDF)
refueling mission in the Indian Ocean. Japan's host nation support
(the so-called sympathy budget) for Japan to contribute to the costs
for U.S. forces stationed in Japan has been suspended at present.
Furthermore, there has been no progress even now on the relocation
of the U.S. Marine Corps Futenma Air Station, which is central to
the realignment plans for the U.S. military transformation.

One informed source grumbled, "Japan's internal affairs have overly
affected the security arrangements. America is sick and tired of
such a Japan. Another informed source complained: "The good
relations between Japan and the U.S. over the past several years
have now entered a phase of erosion."

No strategy in sight

Soon after assuming the post of prime minister last fall, Fukuda

TOKYO 00001061 005 OF 009

pronounced "synergy diplomacy" as his diplomatic approach of
combining Japan-U.S. ties and Japan-China ties. The idea is that
Japan's good relations with both the U.S. and China could help
enhance Japan's presence in those two countries.

However, what is expected to occur in the months ahead is that China
will gain even more power after the Beijing Olympics in August,
while a change of administration will take place in the U.S. next
January. Fukuda, who apparently has been snowed under with the
domestic political struggles, has yet to come out with any proactive
strategy to deal with the rapidly changing global situation.

In preparation for a new U.S. administration that will come into
being next January, an instruction related to the three major U.S.
presidential candidates has been circulated in MOFA that those
officials who have personal networks with the three should travel to
the U.S. and broaden their networks. All Japan can do at present is
perhaps simply try to read where the world is heading.

(3) U.S. forces in Japan in violation of Japan-U.S. agreement with
two sons of U.S. military personnel suspected of shoplifting taken
by U.S. military police to U.S. base

April 17, 2008, 11:08 a.m.

Two sons of United States military personnel were captured on April
13 by a shop clerk at a clothing shop at Chatan Town, Okinawa
Prefecture, for shoplifting. But the boys were later detained by a
U.S. military police officer, and the military officer took them to
a base, rejecting a request made by the prefectural police to
question them. The U.S. military, upon admitting this act was in a
violation of what has been agreed on under the Japan-U.S. Status of
Forces Agreement (SOFA), conveyed its regrets to the Japanese side.

The Japan-U.S. agreement under the SOFA stipulates that if both
police investigators arrive at the scene of an incident, U.S.
investigators should arrest and bring the suspect to the nearest
Japanese police station.

On April 15, the prefectural police sought an explanation from the
U.S. military. A supervisor of the military police officer in
question reportedly admitted to a violation of the agreement and
said: "The military police officer made a mistake. It's regrettable.
I'll train the staff thoroughly."

The prefectural police questioned the two boys on a voluntary basis
with help from U.S. forces in Japan. Reportedly, one of the two boys
denied the allegation, but the other admitted he stole a pair of
jeans and a T-shirt.

(4) Foreign Minister Koumura: U.S. military police officers' action
"considerably problematic," indicating possible protest against U.S.

OKINAWA TIMES (Page 1) (Full)
April 17, 2008

On April 13, two sons of U.S. Marines were caught by a salesclerk of
a clothing store in Chatan, Okinawa Prefecture, for allegedly
shoplifting clothing, but U.S. military officers who arrived at the
scene ahead of Okinawa police officers took them to a U.S. base.

TOKYO 00001061 006 OF 009

Asked about this incident in an Upper House Foreign Affairs
Committee session yesterday, Foreign Minister Masahiko Koumura said:
"I believe this could be greatly problematic." He then added: "I
cannot say anything definitive at this point, but I want to deal
properly with the matter after I receive inquiries (from the U.S.
side)." He indicated in his remark that the government would file a
protest with the U.S. side in the event that contradictions in terms
of legal interpretation are made clear. Komura was responding to a
question by Kantoku Teruya of the Social Democratic Party.

According to a Joint Japan-U.S. Committee agreement, when both Japan
and the United States have the right to arrest suspects connected
with the U.S. military, the U.S. side has priority. The agreement,
however, stipulates that suspects shall be taken to the nearest
police station. Therefore, the fact that the U.S. military police
officers took them to a U.S. base may go against the agreement.

Foreign Ministry North American Affairs Bureau Director General
Shinichi Nishimiya took this view: "It is necessary to make a
cautious decision on whether the incident this time around is
applicable to the 'joint arrest' condition, confirming all the facts
(from the U.S. side)."

Nishimiya also commented: "(The U.S. military police officers) took
the boys to a facility in an area (in the U.S. base) with no
arrangements with the Okinawa police at the scene." He took the view
that the U.S. military officers' action could be problematic in
light of the Japan-U.S. Status of Forces Agreement, which stipulates
that suspects in incidents that occur outside U.S bases shall be
taken to facilities and areas in liaison with the authorities of

(5) I feel discomfort at U.S. consul general's remark; For what
purpose is training in Okinawa carried out?

OKINAWA Times (Page 5) (Full)
April 17, 2008

Kozo Kitajima, 38, teacher in Higashi-son, Okinawa

Dear United States Consul General Kevin Maher:

In a regular press conference on April 3, you said of U.S. military
personnel living off-base: "A call for registering residency is
intended to have (U.S. military personnel) pay tax. It is strange to
say that a tax should be levied on U.S. military personnel, who are
prepared to sacrifice their lives for the sake of Japan's national
security." I feel discomfort at this remark. The point of your
argument is that even if U.S. servicemen live off-base, there is no
need for them to pay tax, since they are ready to lay down their
lives to defend Japan.

Is this argument really valid? The reason you cite for exempting
U.S. servicemen from taxation is divided into two parts: "U.S.
servicemen are contributing to Japan's national security," and "they
are ready to sacrifice their lives for the sake of Japan." If you
point out the contributions to Japan's security, you naturally
should also refer to exemption from taxation for all Self-Defense
Force personnel, who have contributed to ensuring Japan's security.
You might be taking the view that since Americans are engaged in
guarding Japan, a country that is not their own, taxation on them is

TOKYO 00001061 007 OF 009

I think this view deviates from what is written in Article 6 of the
Japan-U.S. Security Treaty. Article 6 specifies that "the United
States Army, Air Force, and Navy are allowed to use facilities and
areas in Japan." This could also be interpreted to mean that U.S.
servicemen are not liable for taxation as long as they live in (the
facilities and areas) provided as bases. I think those who live in
rented houses off-base on their own wishes (I hear that many houses
in bases are vacant) should be willing to pay tax.

Regarding the other part of the reason "they are ready to sacrifice
their lives," I wonder who will judge if you are ready to do so. If
I declare that "I will sacrifice my live for the sake of Japan's
security," will I be exempted from taxation starting today? Or do
you want to emphasize that since Americans are prepared to sacrifice
their lives for Japan, they should be free from taxation?

That does not stand to reason. Because if U.S. servicemen have
Japan's best interest in mind fully enough to be prepared to risk
their lives, they must be willing to pay a certain amount of tax.
Japan has disbursed more than 500 billion yen in tax money for the
U.S. military every year, though I think that is nonsense.

In Higashi-son, where I live, there is a facility for jungle
training for U.S. military troops. U.S. soldiers carry out training
year-round to protect Japan. But I always wonder where jungles are
in Japan. I think jungle training is not necessary to protect Japan.
I fear that this training may be intended not to protect Japan but
to make preparations in Okinawa for launching attacks on other
countries. What about this point? I want to hear an explanation from
you, Mr. Maher.

Sincerely yours,

Kozo Kitajima

(6) Government turns down TCI's application for raising stake in
J-Power, issuing first-ever advisory notice: British fund announces
plan to keep company's shares

NIKKEI (Page 5) (Slightly abridged)
April 17, 2008

The government on April 16 issued a notice telling the Children's
Investment Fund (TCI), a British hedge fund, to drop plans to
increase its stake in J-Power on the basis that a higher stake in
the power company may have a negative impact on the nation's stable
power supply and nuclear policy. TCI criticized the government's
decision, noting that the government recommendation will have
negative implications for the Japanese economy. However, it
announced its intention to keep J-Power shares. Following the move,
a battle over J-Power has entered the third stage. What approach TCI
would make will likely come into focus.

Holding a 9.9 PERCENT stake, TCI is the largest shareholder in the
power utility. It submitted a plan to the government seeking to
increase its stake in the company to 20 PERCENT in compliance with
rules under the Foreign Exchange and Foreign Trade Law. In response,
the Foreign Capital Subcommittee under the Council on Foreign
Exchange and Foreign Trade Control compiled a view that TCI securing
a higher stake in the company could disturb the maintenance of
public order. The government then issued an advisory notice, based

TOKYO 00001061 008 OF 009

on rules stipulated under the Foreign Exchange Law.

Following the issuance of the government's advisory notice, John Ho,
head of TCI's Asian operations, on April 16 told a press conference
that Japan has lost an opportunity to lure long-term investment in
its market. He also rebutted the panel's comment that the fund is
seeking to increase profits from short-term investment.

Ho said, "We have yet to decide how to respond to the government's
move. We want to take our time to look into options." He also noted,
"The fund will keep J-Power shares." It is expected to explore what
approach the fund should take next, following the confrontation with
the company at a shareholders meeting in June last year over its
proposal for a dividend increase and the battle this time with the
government over its plan to raise its stake in the company.

TCI must reply whether it will accept the government recommendation
by April 25. The first scenario is accepting the recommendation as
is, determining that the possibility of its request being met would
be slim, even if they continue talks with the government. In that
case, TCI would shift its focus to calling on J-Power's management
to improve their corporate management.

With a June stockholders meeting just ahead, TCI needs to submit a
stockholder's proposal to the company by the end of April. The
likelihood is that it will strongly urge management to improve r
corporate value, by submitting a proposal seeking an increase in
dividend payments as it did last year.

The second scenario would be TCI opposing the government to the end,
appealing its advisory notice urging it to drop its plan to increase
its share in the power utility. In this case, the government would
take an administrative measure of ordering the fund to give up the
plan. TCI would appeal the order to drop the plan. Then the
situation would fall into a full-fledged fight between the
government and the investor, with the matter developing into a
lawsuit against the government.

TCI, government fail to provide full accounts

The government reached a conclusion that investment in J-Power by
TCI could adversely affect the nation's stable power supply and
nuclear policy. TCI steered clear of indicating a definite policy
regarding J-Power's nuclear power station program and the repair of
power lines. The government also failed to make a clear-cut

The government made an issue over the managerial goal of J-Power
proposed by TCI -- achieving 10 PERCENT in terms of return on
equity (ROE) and 4 PERCENT in terms of return on assets (ROA). It
determined that with TCI's proposal for the management of J-Power
lacking concrete explanations of a policy course to achieve the
goal, there is a strong possibility of its nuclear power station
program being altered.

One senior official of the Resources and Energy Agency said, "There
would not have been any problem if the proposed goal could have been
achieved without slashing funds for the nuclear power station
program or repair expenses." This official thus noted that there had
been a possibility of the government allowing TCI to increase its
stake in J-Power, depending on its approach. However, the advisory
notice is not open to the public. It can be hardly said that the

TOKYO 00001061 009 OF 009

government has fulfilled accountability.

(7) Cabinet Office poll: More people pessimistic about prices, food

TOKYO SHIMBUN (Top play) (Abridged)
April 13, 2008

The Cabinet Office yesterday released the results of its public
opinion survey on public attitudes toward society. When asked for
multiple answers about what was becoming worse in Japan, 42.3
PERCENT of respondents chose "prices," with 40.9 PERCENT picking
"food." Both are about three times higher than in the last survey
taken in January last year and the highest since the survey began to
ask this question. "The economy" topped all other choices at 43.4
PERCENT , up 22.3 percentage points.

The Cabinet Office analysis says: "That might be because rising
crude oil and grain prices affected the people's lives. Food
mislabeling incidents and poisoning from frozen Chinese-made
dumplings have also cast a shadow." The survey results show the
public's growing concern about rising food prices and food safety.

When asked for multiple answers about what is becoming better,
"science and technology" accounted for 21.2 PERCENT , up 1.5 points.
This choice ranked first for the second year in a row, followed by
the choices of "communications and transportation" and
"internationalization." Meanwhile, "healthcare and welfare," which
ranked top in the surveys through 2006, peaked at 27.2 PERCENT in
2005 and spiraled down in the following surveys. This choice ranked
fourth at 15.1 PERCENT in the survey this time.

Respondents were also asked if they have a strong love of Japan. To
this question, "very strong" and "strong to a certain degree"
totaled 57.0 PERCENT , up 4.9 points and the highest ever. "Very
weak" and "weak to a certain degree" totaled 7.0 PERCENT , down 2.7

The survey was conducted across the nation this February with a
total of 10,000 persons aged 20 and over. Answers were obtained from
5,494 persons.

(8) Gov't welcomes U.S. CO2 emission target

ASAHI (Page 2) (Full)
Eve., April 17, 2008

Chief Cabinet Secretary Machimura, meeting the press today, voiced
his appreciation for U.S. President Bush's announcement of a
specific target for the United States to cut its greenhouse gas
emissions. "The Japanese government has been saying there must be a
framework with participation from major emitters," Machimura said.
"This (announcement) is in line with that big move," he added, "so
we welcome it."

Meanwhile, when it comes to Japan's midterm emission target,
Machimura did not clarify whether the Japanese government would
specify a numerical target before this July's Group of Eight (G-8)
summit to be held at Lake Toya in Hokkaido. "Showing figures must
not prevent our consensus building (for the next framework),"
Machimura said.


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