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Cablegate: Daily Summary of Japanese Press 04/28/08

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PP RUEHFK RUEHKSO RUEHNAG RUEHNH
DE RUEHKO #1170/01 1190805
ZNR UUUUU ZZH
P 280805Z APR 08
FM AMEMBASSY TOKYO
TO RUEHC/SECSTATE WASHDC PRIORITY 3820
INFO RUEKJCS/SECDEF WASHDC PRIORITY
RHEHAAA/THE WHITE HOUSE WASHINGTON DC PRIORITY
RUEAWJA/USDOJ WASHDC PRIORITY
RULSDMK/USDOT WASHDC PRIORITY
RUCPDOC/USDOC WASHDC PRIORITY
RUEAIIA/CIA WASHDC PRIORITY
RUEKJCS/JOINT STAFF WASHDC//J5//
RHHMUNA/HQ USPACOM HONOLULU HI
RHHMHBA/COMPACFLT PEARL HARBOR HI
RHMFIUU/HQ PACAF HICKAM AFB HI//CC/PA//
RHMFIUU/USFJ //J5/JO21//
RUYNAAC/COMNAVFORJAPAN YOKOSUKA JA
RUAYJAA/CTF 72
RUEHNH/AMCONSUL NAHA 9896
RUEHFK/AMCONSUL FUKUOKA 7511
RUEHOK/AMCONSUL OSAKA KOBE 1189
RUEHNAG/AMCONSUL NAGOYA 5884
RUEHKSO/AMCONSUL SAPPORO 8109
RUEHBJ/AMEMBASSY BEIJING 3052
RUEHUL/AMEMBASSY SEOUL 9067
RUCNDT/USMISSION USUN NEW YORK 9571

UNCLAS SECTION 01 OF 08 TOKYO 001170

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: DAILY SUMMARY OF JAPANESE PRESS 04/28/08


INDEX:

(1) LDP suffers setback in Lower House by-election; Some members
assume LDP cannot win general election under Fukuda (Mainichi)

(2) Chief Cabinet Secretary Machimura: No change in plan to take
overriding vote on bill amending Special Taxation Measures Law
(Mainichi)

(3) G-8 Sherpas meet with NGOs to discuss preventive measures
against climate change (Asahi)

(4) New Japan-U.S. agreement on HNS approved after one month delay
by Diet (Sankei)

(5) Ishiba eyes strengthening civilian control over SDF (Tokyo
Shimbun)

(6) SDF operations to be integrated into operations bureau (Nikkei)


(7) Aeon Co. to resume sale of U.S. beef (Tokyo Shimbun)

(8) Survey shows 80 PERCENT of local governments to continue
blanket testing even after government ends subsidies (Mainichi)

ARTICLES:

(1) LDP suffers setback in Lower House by-election; Some members
assume LDP cannot win general election under Fukuda

MAINICHI (Page 3) (Full)
April 28, 2008

Hideo Hiraoka, 54, of the main opposition Democratic Party of Japan
(DPJ), defeated Shigetaro Yamamoto, 59, a new candidate backed by
the ruling Liberal Democratic Party (LDP) in yesterday's a Lower
House by-election in the Yamaguchi No. 2 district. The DPJ
candidate's victory means that the public will has voted "no" to
Prime Minister Yasuo Fukuda's management of the government. A sense
of alarm has seized the government and ruling parties. The DPJ, in
turn, now feels it is riding high, believing that a change in
political administrations has now moved closer to reality. However,
with the LDP having been driven to the brink, there is now even the
possibility of removing the barrier to moves to find a successor to
Fukuda as president of the LDP.

Fukuda, who had just returned home from Moscow last night, told LDP
Secretary General Bunmei Ibuki: "The election will not come off,

SIPDIS
will it?"

In LDP headquarters at 9:00 p.m. on April 27, Ibuki said:

"I thought we had caught up with (the opposition). It was a mistake
that sufficient explanations on the new health care system were
never provided. I think we failed to keep our guard up."

The government and ruling coalition will take an overriding vote on
April 30 on a bill amending the Special Taxation Measures Law, which
would lead to reinstating the provisional gasoline tax rates. Now
that the ruling coalition's scenario of gaining popular will by
wining the by-election has ended in failure, there is a view in the

TOKYO 00001170 002 OF 008


ruling camp that ramming the bill through the Diet would provoke a
public backlash against them.

The Lower House will take an overriding vote on May 12 also on a
bill amending the Road Construction revenues Special Exemption Law,
which is aimed to extend for 10 years the tax revenues earmarked for
road construction. However, some junior and mid-level LDP lawmakers
have asserted that resorting an overriding vote goes against the
policy of shifting revenues earmarked for road construction and
maintenance to the general account starting fiscal 2009. In the wake
of the defeat in Sunday's by-election, chances are that this view
will gain ground in the LDP. Some LDP members are raising a view
calling for scrapping the new health care system for the elderly,
which was the main reason for the LDP's loss in the by-election.

Fukuda's management of his administration will face a rough passage.
A senior LDP Upper House member said:

"Even if the DPJ presents a censure motion against Prime Minister
Fukuda, the prime minister will neither shuffle his cabinet nor
dissolve the Lower House. After the Diet session is over, the
political mood will completely change."

A person, who has close ties with Fukuda, sad: "The Group of Eight
summit in Hokkaido in July will become an opportunity (for Fukuda)
to boost the popularity of the government." 'There were no concrete
grounds for the remarks by the two.

Fukuda had not been regarded as strong character to use in
elections. However, a mid-level lawmaker commented following the
defeat of the LDP candidate in the by-election: "We have now learned
that we will not be able to win the next Lower House election." One
faction head, mentioning the name of Taro Aso, said: "I think he is
a safe choice for a candidate to replace Prime Minister Fukuda with
the next Lower House election in mind."

At 7:00 p.m. yesterday when it became likely that the LDP would be
defeated, two cars arrived at the prime minister's official
residence. Those in the cars were former Prime Minister Yoshiro Mori
and former LDP Upper House Chairman Mikio Aoki. The two stayed at
the residence for about two hours and a half. The visits by Mori and
Aoki to the prime minister's official residence suggested how
seriously the Fukuda government had been shaken by the defeat of its
candidate in the by-election.

(2) Chief Cabinet Secretary Machimura: No change in plan to take
overriding vote on bill amending Special Taxation Measures Law

MAINICHI (Page 1) (Full)
April 28, 2008

The candidate backed by the ruling Liberal Democratic Party (LDP)
and its coalition partner New Komeito was defeated in Yesterday's
Lower House by-election for the Yamaguchi No. 2 constituency. This
makes clear how the power of the government of Prime Minister Yasuo
Fukuda has waned. The defeat will likely deal a big blow to the
government and ruling coalition, which will take an overriding vote
on a bill amending the Special Taxation Measures Law. Since the
major opposition Democratic Party of Japan (DPJ) will strengthen the
offensive against the government and ruling camp over the new health
care system for the elderly and the provisional tax rates, the
political situation will become fluid.

TOKYO 00001170 003 OF 008

The government and ruling coalition considered the Lower House
by-election a battle to regain confidence in an overriding vote by
wining it, as well as a good opportunity to dampen the DPJ's
strength.

For this reason, Upper and Lower House members of the ruling parties
conducted a thorough organizational battle by getting support from
the heads of municipalities in the constituency and organizations.
But they failed to overcome the sharp reaction of voters against the
controversial new medical care system for the elderly.

Chief Cabinet Secretary Nobutaka Machimura said last night: "The
nature of the by-election for the Yamaguchi No. 2 seat should not be
considered as the judgment by the whole public. There is no change
in the policy of taking an overriding vote on April 30." However, a
senior LDP member is concerned about the government's hard-line Diet
management, saying: "The gasoline prices that once dropped will be
hiked. A severe view of the government cannot be avoided."

The DJP intends to wait for the right timing for submitting a
censure motion against the prime minister, thinking that the will of
people was shown in the by-election. Chances are that the DPJ will
continue to hold the initiative in the Diet until the current
ordinary Diet session ends on June 15. So, Fukuda will find it
increasingly difficult to steer his administration.

(3) G-8 Sherpas meet with NGOs to discuss preventive measures
against climate change

ASAHI (Page 6) (Full)
April 25, 2008

Visiting Sherpas from the Group of Eight (G-8) countries for
preliminary talks in preparation for the G-8 Hokkaido Toyako Summit
in July had a meeting on April 24 with nongovernmental organizations
(NGOs) in Kyoto City. Representatives from NGOs voiced their
discontent in succession. One representative charged, "The G-8
countries have pledged to do this or that, but they have failed to
implement their promises." The Sherpas from the G-8 countries,
desiring to show their accountability, were pressed to give accounts
of their countries' approaches.

The meeting was hosted by the 2008 Japan G8 Summit NGO Forum, an
organization composed of environment or development-oriented NGOs.
Sherpas from Japan and the European Union (EU), excluding France,
joined the meeting and held discussions with NGO representatives
from Asia and Africa.

A representative from a U.S. NGO voiced a pessimistic view about the
future of climate change, a major focus of debate in the upcoming
G-8 summit, and noted: "We have been disappointed by the G-8
countries. There will certainly be a further setback (at the G-8
Hokkaido Toyako Summit, as well)." An NGO representative from
Bangladesh urged the G-8 countries to take action, claiming: "Using
people's food for biofuel is immoral. I wonder how seriously the G-8
countries think this urgent issue is."

A Japanese NGO representative ripped into the G-8 countries for
their lack of measures in the area of health services and claimed:
"It is necessary to establish a system to monitor progress on the
past and future promises the G-8 made and will make and then report

TOKYO 00001170 004 OF 008


on the results of the progress every year."

In response to critical views voiced by NGO representatives,
Germany's Vice Minister for Economics and Technology Pfaffenbach
said: "We will not move backward. We will take further steps that go
beyond the steps taken last year." U.S. Assistant to the President
Price said: "Action is more important than words. We will make clear
what has happened to past promises." Meanwhile, some cited the
limits of the G-8 summit, with one senior representative, the Sherpa
of the European Union Vale de Almeida, saying, "It is meaningless if
large emerging countries are left outside the framework." Japan's
Deputy Foreign Minister Masaharu Kohno noted: "Conflicting views
exist among the G-8 countries, but the G-8 share the same goal. As
the host of the upcoming G-8 summit, Japan will make efforts to lead
discussions toward a satisfactory conclusion."

(4) New Japan-U.S. agreement on HNS approved after one month delay
by Diet

SANKEI (Page 5) (Full)
April 26, 2008

A Japan-U.S. special measures agreement that extends for another
three years Japan's host nation support (HNS or "sympathy budget")
to cover the costs of stationing U.S. forces in Japan, was approved
in the Lower House in accordance with Article 61 of the Constitution
(stipulating the Lower House's supremacy over the Upper House
regarding treaties), after having been rejected by the Upper House
plenary session on April 25 by a majority of votes from the
opposition parties Democratic Party of Japan (DPJ), the Japanese
Communist Party, and the Social Democratic Party,. The government
will give approval to the agreement at a cabinet meeting on April 30
and it will go into effect in early May. This agreement is a kind of
a treaty. It was the first time under the current Constitution that
the Upper House had rejected the agreement.

The HNS is a system for Japan to pay the utility charges, labor
costs, and the expenses for the transfer of U.S. fighters for night
landing practice. With the expiration of the old treaty at the end
of March, a portion of the payments for the HNS had been suspended.
Under the new treaty, the government will earmark the same budget
amount as under the old treaty in fiscal 2008, but reduce the
utility outlays by a total of 400 million yen in both fiscal 2009
and 2010.

Inappropriate outlays pursued in succession

Hiroyuki Kano

The new HNS special measures agreement failed to be approved in the
Diet by the end of the fiscal 2008 because it was rejected by the
Upper House. This fact has cast a shadow on the Japan-U.S. alliance.
But more meaningful was that in the Diet debates, opposition parties
shed light on inappropriate outlays earmarked as labor costs, for
instance, those for workers working at entertainment facilities. For
the Japanese government, which is in severe fiscal straits, it is a
very heavy burden indeed to pay the HNS budget. Debate over the
transparency of the support funds is likely to gain even more
momentum in the months ahead.

"The HNS has expanded too much. I think we need to debate it from
scratch."

TOKYO 00001170 005 OF 008

This critical remark of the HNS budget came out from Shinkun Haku, a
House of Councilors member of the DPJ, in his arguments against the
HNS budget during the Upper House plenary session on April 25. Even
the ruling Liberal Democratic Party's (LDP) Katsuhito Asano, a House
of Councilors member who is supportive of the HNS budget, was
critical in his remarks to the government, stating: "It is
unacceptable to allow fiscal spending in an unregulated manner.
Japan's burden has been reduced this time, but this amount is not at
all satisfactory."

Prior to signing the new agreement, the Japanese government urged
the U.S. in bilateral talks to drastically cut utility and labor
costs. Defense Minister Shigeru Ishiba also questioned the high
salary levels for Japanese workers at U.S. bases. He pointed out the
need to review the HNS from scratch.

In relation to the Japan-U.S. security arrangements, Japan is
expected to bear a huge burden in the future because of the
construction of a missile defense system and the expenses for the
transfer of Marines from Okinawa to Guam. In order to improve
defense capabilities in a steady manner, while obtaining the
taxpayers' understanding, the government believes it is "necessary
for the U.S. side to make tangible efforts," a senior official
noted.

Meanwhile, the U.S. government has borne a huge spending burden
stemming from the wars in Iraq and Afghanistan. Washington pressed
Tokyo to further increase its financial burden and pay its fair
share of the costs on the grounds of the currently unstable
Northeast Asian situation, owing to China's military expansion. The
amount the U.S. side reduced in this regard was a mere 800 million
yen.

During the debates on the new agreement, the opposition bloc focused
on inappropriate outlays. Shu Watanabe, a House of Representatives
member of the DPJ, posed a question as to why the HNS includes the
salaries for managers of bowling alleys and bartenders. He
criticized the government: "Why does Japan need to pay the costs for
U.S. service members' entertainment on their holidays?"

Debates on the HNS budget in the Diet had gone smoothly in the past,
but problems about the HNS have surfaced this time. This may be a
product of the divided Diet.

But the fact that the agreement signed by both the Japanese and U.S.
governments was approved by the Diet after a one-month delay has
caused the U.S. government to heighten its distrust of the Japanese
government for its inability to promptly implement policy. On top of
that, this was the first time under the current Constitution that a
treaty was rejected by the Upper House. Masahisa Sato, an SDF
officer-turned House of Councilors member of the LDP, expressed a
strong sense of crisis about the future of the Japan-U.S. alliance
when he said: "This may have sent the wrong message not only to the
United States but also to neighboring countries."

(5) Ishiba eyes strengthening civilian control over SDF

TOKYO SHIMBUN (Page 1) (Full)
April 26, 2008

The Defense Ministry yesterday revealed Defense Minister Shigeru

TOKYO 00001170 006 OF 008


Ishiba's plan to reform its organization involving the Self-Defense
Forces. The Ground, Maritime, and Air Self-Defense Forces'
respective staff offices and their chiefs of staff will be off the
SDF's chain of command, according to Ishiba. Instead, the defense
minister will directly command SDF troops. Ishiba plans to integrate
the Defense Ministry's civilian officials and the SDF's uniformed
staff officers to have them better assist the defense minister and
simplify the SDF's chain of command. The plan is aimed at
strengthening civilian control. The Defense Ministry will report the
plan to a government panel in its meeting to be held in May.

The Defense Ministry's internal bureaus and the SDF's sections in
its staff offices for logistics, operations, budget accounts, and
other functions will be integrated and reorganized into new sections
for defense buildup plans, operations, and Diet affairs and public
relations. The SDF Joint Staff Office will be in charge of SDF
operations in general, and the SDF Joint Staff Office chief, who
stands above all SDF personnel, will be responsible for the SDF's
operational functions.

The Defense Ministry's internal bureau directors general currently
serve as defense counselors to advise the defense minister. The
GSDF, MSDF, and ASDF chiefs of staff will be appointed as defense
counselors as a step to revamp the defense ministry's advisory
functions for its minister.

The GSDF, MSDF, and ASDF staff offices will only have units for
personnel management, education, training, and some other
functions.

Surplus personnel will be assigned to SDF units in order to stop
each SDF branch's manning level from declining.

(6) SDF operations to be integrated into operations bureau

NIKKEI (Page 2) (Full)
April 28, 2008

The Defense Ministry yesterday revealed an outline of Defense
Minister Shigeru Ishiba's initiative to reorganize the Defense
Ministry involving the Self-Defense Forces. The Defense Ministry's
internal bureaus and the SDF's uniformed staff offices currently
have their respective functions of planning SDF operations. Ishiba
plans to integrate their respective functions into an operations
bureau to be newly established in the Defense Ministry with the SDF
Joint Staff Office involved. The newly envisaged operations bureau
is to be headed by an administrative official of the Defense
Ministry. The GSDF, MSDF, and ASDF chiefs of staff will be separated
off from the SDF's chain of command and will serve as advisors to
the defense minister. The three SDF branches' respective staff
offices will be substantially downscaled.

The Ishiba plan is aimed at creating a new advisory system that will
better assist the defense minister and that will improve the
efficiency of the SDF's chain of command. The Defense Ministry is
expected to present the plan to a government panel in its next
meeting to be held in May at the prime minister's office. In the
Defense Ministry, however, there are also strong objections to the
Ishiba plan concerning how to position each of the GSDF, MSDF, and
ASDF staff offices. The Defense Ministry may therefore come up with
several plans without specifying details.


TOKYO 00001170 007 OF 008


The Defense Ministry and the SDF staff offices currently have their
respective sections for budget accounts, logistics, and some other
functions. The Ishiba plan is to integrate them into the Defense
Ministry's internal bureaus and will be reorganized into sections
for defense buildup plans, operations, and Diet affairs and public
relations. The GSDF, MSDF, and ASDF staff offices' functions will be
limited to personnel management, education and training management,
and some other functions. Their surplus personnel in the
reorganization process will be assigned to SDF units for their
revamped manpower.

The SDF Joint Staff Office chief will head the operations bureau.
The GSDF, MSDF, and ASDF chiefs of staff will serve as aides to the
defense minister.

(7) Aeon Co. to resume sale of U.S. beef

MAINICHI (Page 8) (Full)
April 26, 2008

Aeon Co. announced yesterday that it would resume the sale of U.S.
beef starting on April 30. The Japanese major supermarket chain
operator will handle U.S. beef for the first time in about four
years and four months since Japan banned imports of U.S. beef in
reaction to the first case of BSE reported in the U.S. in December
2003.

Of the major supermarket chains, only Aeon has refrained from
selling U.S. beef, but it has decided to resume the sale of U.S.
beef now that it has completed its company system to ensure the
safety of U.S. beef, including checking all products.

Aeon made the decision at a time when other supermarket chains have
decided to remove U.S. beef from their shelves following a recent
case of specified risk material (SRM) found in a beef shipment from
the U.S. On the decision, Yasuhide Chikazawa, an Aeon manager, said:
"We received confirmation that even if SRMs are mixed in boxes bound
for Japan, such materials will be removed in our final check." He
also cited the yen's recent appreciation against the dollar as
another reason for its decision.

Aeon itself will examine beef products from the U.S. to check if the
import conditions are met and then will receive a third party's
health safety certificate. Aeon has decided to inspect all beef
products twice - after products clear the customs and when products
are processed - as measures to ensure their safety.

On April 30, Aeon will resume the sale of U.S. beef at Jusco
Shinagawa Seaside Outlet. On May 10-11, a total 20 tons of U.S. beef
will be placed on shelves at about 47 Jusco outlets across the
nation. Aeon will sell U.S. beef one weekend every month.

(8) Survey shows 80 PERCENT of local governments to continue
blanket testing even after government ends subsidies

TOKYO SHIMBUN (Page 3) (Full)
April 26, 2008

Of 76 local governments that have conducted BSE inspections on
domestic cows, 64 governments or 80 PERCENT of the total have
decided to continue their blanket testing, including testing of even
cattle 20 months of age or younger, at their own expenses for the

TOKYO 00001170 008 OF 008


time being after the government ends its subsidies in August,
according to survey results revealed yesterday by Kyodo News
Agency.

Following a specified risk material found recently in a beef
shipment imported from the United States, attention is being focused
on the safety of beef again. Under such circumstances, consumers are
expected to place greater confidence in domestic beef in terms of
safety. Meanwhile, some officials are voicing concern about the
additional burden to be imposed on local government finances for the
testing of cattle aged 20 months or younger. An official of the
Inspection and Safety Division of the Health, Labor and Welfare
Ministry says that testing calves is meaningless from a scientific
perspective."

Those local governments willing to continue blanket testing have
earmarked testing costs in their FY2008 initial budgets. The total
amount is different according to the number of cows inspected,
ranging from approximately 35 million yen in the case of Hokkaido to
several tens of thousands of yen. The central government has
subsidized the full amount of inspection costs, but this system will
be completely abolished in August.

Asked about why he had decided to continue blanket testing, Niigata
Governor Hirohiko Izumida said: "There are still deep-seated
concerns about BSE among consumers." But many gave this reply: "It
is undesirable for us alone to stop blanket testing." In response to
a question asking how long the testing will continue, most said they
have not decided yet what to do after fiscal 2009. A Kagawa
prefectural government official said: "If we are unable to stop
blanket testing, we will face a fiscal problem."

Most of the remaining 12 municipal governments replied that they
remained undecided and were in the process of discussing what to do.
They generally are inclined to continue blanket testing for the time
being. A Tokyo government official said: "Since there are not many
cattle around aged 20 months or younger, we will be able to carry
out testing within our budget." A Kumamoto government official
remarked: "We have not earmarked the necessary amount since it is a
provisional budget, but discussion is underway on the possibility of
continuing testing."

SCHIEFFER

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