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Cablegate: Japanese Morning Press Highlights 04/08/08

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UNCLAS SECTION 01 OF 10 TOKYO 000948

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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: JAPANESE MORNING PRESS HIGHLIGHTS 04/08/08


Index:

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

4) Yomiuri poll on constitution reform finds drop in approval rate
to 42.5 PERCENT and those against revision now higher at 43.1
PERCENT (Yomiuri)

Politics in disarray:
5) Democratic Party of Japan (DPJ) will accept Shirakawa as new Bank
of Japan governor but is opposed to Watanabe as his deputy (Asahi)

6) Government, ruling parties on defensive in Upper House debate on
pension issue with no tools to restore public confidence wrecked by
broken pledge (Mainichi)
7) DPJ has run out of ammunition for attack?: Lacked punch in
pursuing pension issue (Sankei)
8) Yomiuri survey finds 42 out of 47 prefectural governors want
restoration of the provisional tax rates, whose revenues their
governments depend on (Yomiuri)
9) LDP policy chief Nobuteru Ishihara pessimistic that Lower House
will be able to muster enough votes to override Upper House on
restoring road-related taxes (Yomiuri)
10) LDP election chief Koga and former Prime Minister Koizumi are
now talking about the possibility of an early dissolution of the
Lower House (Yomiuri)
11) Prime Minister Fukuda hints at touching on consumption tax as
part of tax reform debate (Asahi)

Foreign affairs:
12) Japanese, Russian vice foreign minister-level strategic dialogue
to set the stage for Fukuda's pre-G8 summit visit to Moscow
(Nikkei)
13) Vice Foreign Minister Yabunaka to visit the U.S. on April 9
(Nikkei)
14) Foreign Ministry's North Korea talks delegate Saiki to travel to
Beijing for briefing by Assistant Secretary Hill on his meeting with
DPRK delegate (Nikkei)
15) Discussions of Africa Partnership Forum on African aid to be
reflected in the G8 summit (Asahi)

Defense affairs:
16) Defense ministry readies final report of reform of procurement
system (Mainichi)
17) Non-partisan parliamentarian league restarts activity to promote
permanent SDF dispatch law (Nikkei)

Articles:

1) TOP HEADLINES

Asahi, Mainichi, Yomiuri, Nikkei:
Shirakawa set to be approved as BOJ chief, but appointment of
Watanabe as deputy governor uncertain

Sankei & Tokyo Shimbun:
Olympic torch relay cut short in Paris

Akahata:
JCP points out problems in medical system for very old patients

TOKYO 00000948 002 OF 010

2) EDITORIALS

Asahi:
(1) Japan should also decide to eliminate cluster bombs
(2) Basketball association: Don't disappoint children's dreams

Mainichi:
(1) With new plan for BOJ top posts, settlement should be reached
(2) Upper House pension debate: We no longer want to listen to
excuses

Yomiuri:
(1) Put end to dispute over nominations for BOJ top posts
(2) Poll shows political mess cooling public support for
constitutional revision

Nikkei:
(1) Vacant seat will be finally filled if Shirakawa assumes
governorship, but problems remain
(2) Change policy to increase ODA disbursements

Sankei:
(1) Olympic torch relay: Solution based on Olympic spirit desired
(2) U.S.-Russia summit leaves possibility of new cold war in future

Tokyo Shimbun:
(1) Fukuda administration should reflect on mishandling of
nominations for BOJ top posts
(2) U.S., Russian leaders end meeting without results

Akahata:
(1) Stop work for free or for long hours by corporate managers

3) Prime Minister's Official Residence (Kantei)

Prime Minister's schedule, April 7

NIKKEI (Page 2) (Full)
April 8, 2008

08:04
Arrived at Kantei.

09:00
Attended an Upper House Budget Committee session.

12:05
Met with Finance Minister Nukaga, joined by Chief Cabinet Secretary
Machimura. Nukaga remained.

13:00
Attended an Upper House Budget Committee session.

16:35
Met with Nukaga and Machimura.

17:23
Attended an LDP executives' meeting.

17:55
Met with MOFA Asian and Oceanic Affairs Bureau Director-General

TOKYO 00000948 003 OF 010


Saiki at Kantei.

18:21
Met with Machimura.

18:55
Dined with Nippon Keidanren Chairman Mitarai, Toyota Motor Advisor
Hiroshi Okuda, NTT Chairman Norio Wada, Nippon Steel Corporation
Honorary Chairman Takashi Imai and others at Le Trianon at Grand
Prince Hotel Akasaka.

20:31
Arrived at Kantei residence.

4) Poll: 42.5 PERCENT for constitutional revision, 43.1 PERCENT
against

YOMIURI (Page 1) (Full)
April 8, 2008

The proportion of people against constitutional change outstripped
that of those for it, though slightly, the Yomiuri Shimbun found
from its recent face-to-face nationwide public opinion survey. In
the survey, 42.5 PERCENT answered that they think it would be
better to revise the Constitution, with 43.1 PERCENT saying they
think it would be better not to revise it. However, a total of 71
PERCENT think political parties should further discuss the
Constitution. Meanwhile, more than 70 PERCENT also think it would
be better to amend some of the Constitution's provisions or add new
provisions to the Constitution. People seem to be strongly aware
that Japan's postwar constitution, which will mark its 61st
anniversary this year, has now become outdated in many respects.

The survey was conducted Mar. 15-16 as a part of the Yomiuri
Shimbun's annual serial polling on Japan and its people.

The serial survey on the Constitution started in 1981. In the 1993
and following surveys, the proportion of those in favor of
constitutional change consistently outstripped that of those against
it. In the latest survey, however, the proportion of pro-revision
people decreased 3.7 percentage points from last year. Meanwhile,
the proportion of anti-revision people increased 4.0 points, topping
the proportion of pro-revision people. Former Prime Minister Abe was
strongly willing to revise the Constitution, but he suddenly stepped
down. In addition, the Diet has been divided, with the ruling
coalition dominating its lower chamber and the opposition camp
controlling its upper chamber. This parliamentary standoff has
brought about the current stagnation of state affairs. The results
of the survey this time can be taken as reflecting such factors.

In the survey, those in favor of constitutional revision were asked
to pick one or more reasons. Among them, the most common reason was
"because the Constitution can no longer allow Japan to meet
international contributions and many other newly arising
challenges," accounting for 45 PERCENT . Among those negative about
constitutional revision, the most common reason was "because it is a
pacifist constitution Japan can boast of in the world" at 53 PERCENT
.

When asked to pick one or more concerns about the Constitution, "war
renunciation and the Self-Defense Forces" accounted for 47 PERCENT ,
topping all other answers for the seventh year in a row. "Court

TOKYO 00000948 004 OF 010


trials" accounted for 20 PERCENT (15 PERCENT in last year's
survey). This shows the public's growing concern about the lay judge
system.

Respondents were also asked for multiple answers about what they
thought it would be better to amend or add. To this question, many
cited Japan's possession of armed forces for self-defense (27
PERCENT ), "right to live in a good environment" (25 PERCENT ), and
"state and local roles" (22 PERCENT ). "Nothing in particular"
accounted for 24 PERCENT .

5) DPJ set to approve nomination of Shirakawa as BOJ governor but
likely to oppose appointment of Watanabe as deputy governor

ASAHI (Top Play)
April 8, 2008

The government yesterday made a proposal to the Diet to appoint Bank
of Japan (BOJ) Deputy Governor Masaaki Shirakawa as BOJ governor and
Hitotsubashi University Professor Hiroshi Watanabe as one of the
central bank's two deputy governors. The Democratic Party of Japan
(DPJ) has decided to agree on Shirakawa's promotion, but the party
is likely to oppose the nomination of Watanabe, a former vice
finance minister for international affairs, reflecting party leader
Ozawa's opposition to the idea.

The government had intended to submit the plan of nominating
Watanabe for the BOJ deputy governor post in yesterday early
afternoon but delay it by about five years. Some officers in the
government and the ruling parties suggested that if no prospects are
in sight for the main opposition party to approve the Watanabe plan,
they should put off presenting the plan or submitting only the plan
for Shirakawa governorship plan. But reflecting Prime Minister
Fukuda's strong desire to nominate a former Finance Ministry
official well versed in financial policy for one of the three top
posts, the government and the ruling camp decided to present the
plan of nominating Shirawawa and Watanabe without ensuring the DPJ's
agreement.

The Steering Committees of both chambers of the Diet Affairs
Committee will hold hearings with Shirakawa and Watanabe today. If
the Shirakawa plan is endorsed in plenary sessions of both Houses of
the Diet tomorrow, the governorship will be filled after a lapse of
about three weeks. The government wants to send Shirakawa to a
meeting of the Group of Seven (G-7) finance ministers and central
bank governors to be held in Washington on April 11.

DPJ executives, including Ozawa and Secretary General Yukio Hatoyama
discussed how to respond to the government's new plan last night.
Hatoyama insisted that the party should give an agreement to the
plan, but Diet Affairs Committee Chairman Kenji Yamaoka and House of
Councillors chairman Azuma Okoshi expressed their opposition.

6) Government, ruling bloc on defensive over pension issue at Upper
House budget panel with no golden remedy in sight

MAINICHI (Page 5) (Full)
April 8, 2008

Keishi Yoshida

At a session yesterday of the Upper House Budget Committee, Prime

TOKYO 00000948 005 OF 010


Minister Yasuo Fukuda offered an apology for the first time for the
unidentified 50 million pension accounts, by saying, "We have
provided misleading information." The prime minister apparently had
to admit that the ruling parties' campaign pledge advocated in the
Upper House election last year made the public expect that the
pension fiasco would be resolved in March. The government is now
desperate to restore public confidence, but there is no golden
remedy to do so. The ruling parties appear helpless in face of
verbal attacks from the opposition bloc, which is gaining momentum.

Former Prime Minister Shinzo Abe stated, "We will identify every
owner of the unidentified accounts to pay pension correctly." Health
and Labor Minister Yoichi Masuzoe remarked, "We will deadly endeavor
to identify the last unidentified one yen account."

At an Upper House Budget Committee hearing yesterday, Masamitsu
Naito of the major opposition Democratic Party of Japan (DPJ),
citing a series of remarks made by senior ruling coalition members
concerning the unidentified pension premium accounts, grilled Fukuda
by arguing, "You fabricated the campaign pledge. You should offer a
sincere apology." Fukuda, admitting that "there was the phrase that
misled the public," apologized: "We have made (the public) harbor
excessive hopes. I must apologize for that."

Until then the prime minister brushed aside any criticism over the
pension issue by noting, "We have pushed ahead with the process of
identifying the mysterious accounts." But faced with the fact that
40 PERCENT of those accounts still remain unidentified at present,
Fukuda appeared to conclude that he was unable to make any more
excuse.

Still, Fukuda did not admit to violation of the campaign pledge till
the last. The DPJ is insisting that the government can't turn the
current measures around unless it admits its mistake. The DPJ has
urged the government to check 850 million handwritten records with
the records stored in the computer. But it is never an easy task to
earmark billion yen or perhaps more as a budget to do so. All the
government can do now would be at least to increase the number of
staff who will be engaged in checking the unidentified records. A
senior Social Insurance Agency official revealed difficulties in
identifying the mysterious records, by noting, "There seems to be no
showy resolution."

Taking advantage of the difficulties the government has faced, the
DPJ has shifted its tactic to use both the pension fiasco and the
new medical care system for the elderly to attack the government.
At a budget committee hearing yesterday, Nobuo Matsuno of the DPJ,
eyeing the start of withholding insurance premiums for the new
medical system on April 15, grilled the prime minister with this
expression, "Withholding the premiums all of sudden is what a cruel
bailiff can do."

In response, the government assumed a defensive stance by abruptly
changing the name of the system and indicating this simulation that
in the case of those who receive a full amount of a pension from the
government (66,000 yen per month), the current premium of 2,800 yen
will decline to 1,000 yen or so. But the premium will be unavoidably
raised in the future. But the government is unable to come up with a
next step.

7) DPJ has run out of ammunition for attack?: Lacked punch in
pursuing pension issue

TOKYO 00000948 006 OF 010

SANKEI (Page 5) (Full)
April 8, 2008

The Democratic Party of Japan (DPJ or Minshuto) is enthusiastic
about attacking the government with one noting, "We will thoroughly
pursue pension and medical services issues, following the road funds
issue." However, during intensive deliberations on social security
matters held on April 7 at the House Budget Committee, they did
nothing but ask questions that have already been taken up in the
Diet. All the more because President Ichiro Ozawa during a press
conference on the 1st had emphatically revealed his determination to
consider submitting a censure motion against Health, Labor and
Welfare Minister Yoichi Masuzoe, their approach gave the impression
that they lacked punch.

Four DPJ members asked questions that day, of whom three brought up
the pension premium payment record issue. Masamitsu Naito said that
there are omissions of benefit payments even in cases which the
Social Insurance Agency categorized as "settled." He criticized the
case as the camouflage of words. He succeeded in having Prime
Minister Yasuo Fukuda offering an apology. However, Masuzoe fended
off his pursuit, saying, "We will investigate into the case in order
of priority." Questions the remaining two asked lacked freshness.
The government's side repeatedly made the same replies it gave
previously.

The Budget Committee meeting on the 7th was televised nationwide.
However, the DPJ saved members who have actively brought up the
pension issue, including Renho, for an Upper House Health, Labor and
Welfare meeting on the 8th. However, since their pursuit of the
government was sluggish, some DPJ members criticized the party's
strategy, saying, "It was a strategic mistake that we did not let
them take part in the televised Budget Committee meeting." On the
other hand, some ruling party members made a remark in a relaxed
manner, "The DPJ is continuing to make a fuss over the pension
issue. They might have run out of ammunition for an attack."

8) 42 governors want provisional taxation restored

YOMIURI (Page 2) (Abridged)
April 8, 2008

The Yomiuri Shimbun conducted a questionnaire survey of all
governors about restoring gasoline and other provisional tax rates
and about incorporating road-related tax revenues into the state's
general account budget for general-purpose spending as well as for
road construction and other road-related infrastructure projects.

Among the 47 governors, 42 supported the idea of restoring the
gasoline and other provisional tax rates, with none of them opposing
it. The governors of five prefectures-Aomori, Iwate, Akita,
Kanagawa, and Kyoto-did not specify whether or not they support the
idea of restoring the provisional tax rates. When asked about the
idea of using road-related tax revenues for general purposes, "yes"
came from only four governors, including the governor of Tokushima
Prefecture. "No" came from 11 governors, including Tokyo's.
Meanwhile, 32 governors did not specify whether or not they support
it.

The 42 governors in support of restoring the provisional tax rates
complained of their plights, with Miyazaki Gov. Hideo

TOKYO 00000948 007 OF 010


Higashikokubaru saying, "This will also affect healthcare, welfare,
education, and other areas." The same question was asked in a
nationwide public opinion survey conducted by the Yomiuri Shimbun on
Apr. 1-2. In this public opinion survey, "yes" accounted for 27
PERCENT , with "no" at 57 PERCENT . The results show a perception
gap between the people and the governors.

9) Former LDP policy chief Ishihara: Dual overrides of Upper House
decisions difficult

YOMIURI (Page 4) (Full)
April 8, 2008

Nobuteru Ishihara, former chairman of the Liberal Democratic Party
Policy Research Council, said yesterday in a speech in Tokyo:

"It will be quite difficult as a political matter to take revotes in
the House of Representatives on tax-related bills in April and on a
bill amending the Special Taxation Measures Law in May. If (the
opposition) submits a censure motion against Prime Minister Fukuda
to the House of Councillors and the motion is adopted there, we will
not be able to do anything in the Diet. Calls for a vote of
confidence may become strong."

10) Koizumi, Koga expecting early Lower House dissolution

YOMIURI (Page 4) (Abridged slightly)
April 8, 2008

LDP Election Strategy Council Chairman Makoto Koga and former Prime
Minister Junichiro Koizumi made speeches at a fund-raising party
held yesterday evening by the LDP Kanagawa chapter. In their
speeches, the two leaders pointed out the possibility of an early
dissolution of the House of Representatives.

Koga said about the timing for Lower House dissolution for a snap
general election:

"Throwing a party like this, the Kanagawa chapter has demonstrated
its readiness for the next election. Your observation of the
political situation is splendid. I, too, must say, 'Something is
coming up,' rather than to note, 'An election within the year is
unlikely.'"

Koizumi said:

"I feel that a certain kind of wind (wind of dissolution) has begun
to blow. In the pervious Lower House election, all candidates
(including those who ran in the proportional representation segment)
backed by the prefectural chapter were able to win seats, so you
really need to buckle down. The divided Diet has brought about an
age of tremendous change. Only those lawmakers and political parties
that can deal with change can survive."

Koizumi also underlined the need for boldness and flexibility.

Koga had previously expressed hope that the next Lower House
election will take place around September 2009, when the Lower House
members' term of office expires. Koizumi, too, had noted, "There is
a possibility that the Lower House will be dissolved after next
year's G-8 summit." They made the statements yesterday in an effort
to brace up the party and to apply pressure on the major opposition

TOKYO 00000948 008 OF 010


Democratic Party of Japan, which is taking an increasingly
antagonistic stance against the Fukuda administration.

11) "Tax code revision discussions will cover consumption tax as
well," says premier

ASAHI (Page 4) (Full)
April 8, 2008

Prime Minister Fukuda during an Upper House Budget Committee meeting
on April 7 once again indicated his intention to implement his
proposal for reallocating special-purpose road construction revenues
to the general account in the tax code revision for fiscal 2009,
even if revision talks with opposition parties do not take place. He
indicated his perception that a hike in the consumption tax will
also be subject to discussion, noting, "Whether the consumption tax
should be increased or not will naturally be discussed in amending
the tax code. The consumption tax will naturally be included in the
tax code revision for the next fiscal year, if proposed expenditures
or payouts financed with a hike in the consumption tax are
appropriate for the nature of the tax." He made this remark in
replying to a question asked by Social Democratic Party (SDP) member
Masamichi Kondo.

12) Japan-Russia vice minister level strategic dialogue held to pave
way for visit to Russia by Prime Minister Fukuda

NIKKEI (Page 2) (Full)
April 8, 2008

The Japanese and Russian governments held yesterday a vice minister
level strategic dialogue at the Foreign Ministry's Iikura Guest
House in Tokyo. With an eye on a visit to Russia by Prime Minister
Yasuo Fukuda planned for sometime before the Group of Eight summit
in July in Hokkaido, the vice minister-level officials discussed a
broad range of issues, including the Northern Territories issue.
They confirmed that Tokyo and Moscow would raise a bilateral
relationship a higher dimension through summit-level political
dialogue.

Yesterday's strategic dialogue was the fourth since such exchanges
were initiated in January last year. Vice Administrative Foreign
Minister Mitoji Yabunaka and First Deputy Foreign Minister Andrey
Denisov attended the session. The two officials exchanged views on
the resources development in East Siberia, for which the Russian
side has sought Japan's technical cooperation, and bilateral
cooperation on the environmental area for the G8 summit. They appear
to have discussed the missile defense development, which the United
States has planned in East Europe.

Yabunaka in a press conference yesterday stated: "Russia has strong
interest in the Asia-Pacific region. There are areas in which the
two countries can cooperate more than ever." He then expressed
eagerness for building a close relationship with Russia.

13) Vice Foreign Minister Yabunaka to visit U.S. on April 9

NIKKEI (Page 2) (Full)
April 8, 2008

The Foreign Ministry announced yesterday that Administrative Vice
Foreign Minister Mitoji Yabunaka will leave for Washington tomorrow

TOKYO 00000948 009 OF 010


for a four-day visit. He is expected to exchange views with Deputy
Secretary of State Negroponte on a series of incidents involving

SIPDIS
U.S. military personnel in Japan, as well as on the state of Diet
deliberations on a new bill on Japan's host nation support for U.S.
forces in Japan. This will be Yabunaka's first visit to the United
States since taking office.

14) Asian and Oceanian Affairs Bureau chief Saiki to meet Assistant
Secretary of State Hill

SIPDIS

NIKKEI (Page 2) (Full)
April 8, 2008

The Foreign Ministry announced yesterday that Asian and Oceanian
Affairs Bureau Director General Akitaka Saiki will visit Beijing for
two days from today. The main purpose of his visit is to be briefed
by U.S. Assistant Secretary of State Christopher Hill about his
talks with his North Korean counterpart today in Singapore on the
North's nuclear programs.

15) Discussion on aid to Africa starts

ASAHI (Page 4) (Full)
April 8, 2008

The Africa Partnership Forum for donor nations, including G8
members, to discuss how to help Africa with representatives of 21
African nations started in Tokyo yesterday. Participants will
finalize their discussions on climate change and economic growth in
the form of a chairman's summary and have it reflected in the July
Lake Toya G8 Summit in Hokkaido, where Africa will be a major item
on the agenda.

16) MOD reform council: Debate on procurement reform losing steam
due to calming down Moriya scandal

MAINICHI (Page 5) (Abridged slightly)
April 8, 2008

The government's Council on Reform of the Ministry of Defense,
chaired by Tokyo Electric Power Co. advisor Nobuya Minami, discussed
yesterday a final report on reform of equipment procurement,
produced by the MOD in the wake of a bribery scandal involving
former Vice-Defense Minister Takemasa Moriya. Calls for sweeping
reform emerged following a string of scandals that followed a 1998
bill-padding scandal involving the then Defense Agency Central
Procurement Office. This time around, the interest of the Prime
Minister's Office (Kantei) and the ruling coalition centered on the
MOD's organizational reform. Given the Moriya scandal that is likely
to be concluded in time, the discussion on procurement reform,
however, lost steam in the end, concluding that the matter requiring
specialized expertise must be left to the MOD.

The report released by the MOD in late March is designed to (1)
require the ministry to make direct inquiries to overseas
manufacturers about estimates, and (2) collect twice the difference
in penalty for bill padding. Defense Minister Shigeru Ishiba
initially ordered to consider concluding contracts directly with
makers without trading firms. This drew objections, with one saying,
"Nurturing a large number of experts replacing trading firms is
difficult." In the end, numerical targets of direct contracts and
other factors were not presented. Further, modalities for the three

TOKYO 00000948 010 OF 010


weapons-export principles, which were expected to become a point at
issue, did not make the report.

In yesterday's meeting, members said, "The ministry should first
explain to the public on what kind of equipment it needs," or "A
system must be created in which the MOD self-examines the efficacy
of equipment to be procured." However, with no experts in
procurement in its members, the council is heading toward bringing
down the curtain on its discussion, as seen in a high-ranking
government official's comment, "Contentious points have generally
been discussed." Procurement is apparently placed on the backburner,
with attention focused on the MOD's organizational reform, such as
Ishiba's plan to integrate the internal bureaus with the
Self-Defense Forces.

Further, with the Moriya scandal stopped short of escalating into a
political scandal, the government's initial plan to structurally
reform the procurement system has now lost steam. "The report
includes only minor items that can be implemented immediately," a
senior MOD official said.

17) Suprapartisan parliamentary league to resume activities to
establish SDF dispatch permanent law

NIKKEI (Page 2) (Full)
April 8, 2008

The Young Parliamentarians' League to Establish a Security System
for a New Century, which is composed of junior and mid-level
lawmakers from the ruling Liberal Democratic Party, its coalition
partner New Komeito, and the main opposition Democratic Party of
Japan (DPJ or Minshuto), will resume its activities for the first
time in three years. The league plans to hold a general meeting in
April. The aim is to back an argument calling for formulating a
permanent (general) law enabling Japan to dispatch the Self-Defense
Forces (SDF) overseas as required, debate on which has been stalled
due to the divided Diet, in which the opposition camp holds the
majority in the House of Councillors.

The parliamentary league has ceased its activities since April 2005
when its some members made an inspection of the East China gas
fields. The group will ask former LDP Security Research Commission
Chairman Gen Nakatani, former DPJ President Seiji Maehara, and Isamu
Ueda of the New Komeito to participate in the planned meeting. About

SIPDIS
100 legislators will likely take part in the meeting.

SCHIEFFER

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