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Cablegate: Daily Summary of Japanese Press 05/02/08

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UNCLAS SECTION 01 OF 09 TOKYO 001216

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DEPT FOR E, P, EB, EAP/J, EAP/P, EAP/PD, PA;
WHITE HOUSE/NSC/NEC; JUSTICE FOR STU CHEMTOB IN ANTI-TRUST DIVISION;
TREASURY/OASIA/IMI/JAPAN; DEPT PASS USTR/PUBLIC AFFAIRS OFFICE;
SECDEF FOR JCS-J-5/JAPAN,
DASD/ISA/EAPR/JAPAN; DEPT PASS ELECTRONICALLY TO USDA
FAS/ITP FOR SCHROETER; PACOM HONOLULU FOR PUBLIC DIPLOMACY ADVISOR;
CINCPAC FLT/PA/ COMNAVFORJAPAN/PA.

E.O. 12958: N/A
TAGS: OIIP KMDR KPAO PGOV PINR ECON ELAB JA

SUBJECT: DAILY SUMMARY OF JAPANESE PRESS 05/02/08

INDEX:

(1) When will the right timing be for DPJ to submit a censure motion
against Prime Minister Fukuda? (Tokyo Shimbun)

(2) Prime Minister Fukuda to recharge batteries during Golden Week
holidays (Tokyo Shimbun)

(3) Zeal for constitutional revision absent from political community
(Asahi)

(4) 2 years after U.S. military realignment accord: Dark clouds
looming over 2014 completion (Tokyo Shimbun)

(5) Public opinion rejecting nuclear bombers forces cancellation of
U.S. military's B-52 flight to Iwakuni (Akahata)

(6) International crime-prevention assistance expected to be
discussed at G-8 ministers' conference of justice and internal
affairs in June (Asahi)

(7) Misawa Air Base service member arrested for sexually harassing
teenager on street (Yomiuri)

(8) Exporting companies revise nominal exchange rate due to yen's
appreciation stronger yen: Fall in profits worth 1.2 trillion yen
attributable to strong yen (Nikkei)

(9) Expenses needed to implement DPJ-proposed polices to exceed 20
trillion yen -- increase due to abolition of provisional gas tax
rate (Nikkei)

ARTICLES:

(1) When will the right timing be for DPJ to submit a censure motion
against Prime Minister Fukuda?

TOKYO SHIMBUN (Page 2) (Abridged)
May 2, 2008

Although the government and ruling parties rammed through a bill to
reinstate the provisional tax rates, including the gasoline tax, by
a two-thirds overriding vote in the House of Representatives, the
major opposition Democratic Party of Japan (DPJ) forwent submitting
a censure motion against Prime Minister Yasuo Fukuda to the House of
Councillors. The DPJ has, however, asserted that it still plans to
present a censure motion to the upper chamber. When will the largest
opposition party submit a motion? This newspaper probed into what
might be the right timing for the DPJ to submit it.

In principle, a censure motion against a prime minister can only be
submitted once in a Diet session. Therefore, it is important that
the DPJ submit it at the right timing to lead to dissolution of the
Lower House and a general election.

(The first right timing would have been immediately after the tax
code bill was readopted.) The second right timing would be on May 13
when the ruling coalition is expected to take a revote on a bill
amending the Road Construction Revenues Special Exemption Law aimed
to retain the road-related tax rates for another 10 years.

DPJ President Ichiro Ozawa has said that a revote on this bill is

TOKYO 00001216 002 OF 009


consistent with Fukuda's policy of shifting the tax revenues
earmarked for road construction and maintenance to the general
account (starting 2009). So, the dominant view in the largest
opposition party is that the right timing for the party to submit a
censure motion would be May 13.

However, Fukuda has no intention to dissolve the Lower House and his
cabinet even if a censure motion is adopted in the Upper House. If
so, the DPJ will not be able to respond to Diet deliberations for
about one month until the ongoing session ends on June 15 for the
reason that they could no longer deliberate on matters under a prime
minister who had been reprimanded. Therefore, chances are that a
view will gain ground in the DPJ that the party should forgo its
plan to submit a censure motion on May 13.

The third right timing for the submission would be sometime after
ascertaining how Fukuda handles the controversial health care system
for the elderly.

(2) Prime Minister Fukuda to recharge batteries during Golden Week
holidays

TOKYO SHIMBUN (Page 2) (Full)
May 2, 2008

Prime Minister Yasuo Fukuda forwent his planned visit to the Europe
during the Golden Week holidays. For now, Fukuda will be off on May
3-5. He is expected to recharge his batteries during that period at
his official residence. He intends to devise a strategy for his
summit on May 7 with Chinese President Hu Jintao, who will arrive in
Tokyo on May 6. The prime minister will hold a dinner party for the
president on the night of the 6th.

Fukuda intends to hold on May 13 a revote on a bill amending the
Road Construction Revenues Special Exemption Law in the House of
Representatives. It is expected that tensions will rise again in the
Diet. Fukuda will be able to have a good rest during the three days
off.

(3) Zeal for constitutional revision absent from political
community

ASAHI (Page 2) (Abridged)
May 2, 2008

The constitutional debate has lost steam under the divided Diet.
Holding power in the two chambers of the Diet, the ruling parties
forcibly enacted national referendum legislation last year. Such
vigor is absent today. May 3 is Constitution Day. The constitutional
debate is likely to continue languishing for some time.

The parliamentary league to establish a new constitution met
yesterday at the Constitutional Government Commemoration Hall in
Tokyo's Nagatacho. Former Prime Minister Yasuhiro Nakasone, who was
named the group's chair in the session, declared: "The Constitution
was born after WWII. It is our responsibility to make it into a
correct constitution to pass it on to our descendants. I will devote
myself to achieve that goal." Former Prime Minister Shinzo Abe also
said: "A resolution to write the new Constitution with our own hands
will result in a spirit to open up a new era."

The meeting brought together 51 lawmakers and some 1,000 business

TOKYO 00001216 003 OF 009


leaders and local politicians. From the LDP, Secretary General
Bunmei Ibuki, former Vice-President Taku Yamasaki, and Chief Cabinet
Secretary Nobutaka Machimura attended the session as guests.

SIPDIS

The league's office had requested speeches by Democratic Party of
Japan Secretary General Yukio Hatoyama and former DPJ President
Seiji Maehara, but they did not show up at the event. DPJ Deputy
Secretary General Akihisa Nagashima gave a speech on their behalf

SIPDIS
indicating that amending the Constitution is his party's policy, as
well. This was met with rapturous applause.

The LDP league to establish a home-grown constitution was expanded
last fall to include members of the DPJ, New Komeito and the
People's New Party in line with the view that cross-party efforts
were essential to advance the constitutional reform movement. But
some LDP members are skeptical about reaching an agreement with
conservative DPJ and New Komeito lawmakers.

During his tenure as prime minister, Abe fostered momentum for
enacting the national referendum legislation, saying, "I want to put
constitutional revision on the political agenda." The DPJ and other
opposition parties objected to Abe's stance, saying, "His statement
neglected the Diet, the highest organ of state power."

Back then, Prime Minister Yasuo Fukuda witnessed such a reaction as
a director of the House of Representatives Special Research
Committee on the Constitution. In his policy speech, Fukuda simply
stated, "I strongly hope for earnest discussions by all political
parties."

The LDP's efforts not to irritate the DPJ do not pave the way for
constitutional revision. The priority order of policy issues has
changed completely under the divided Diet.

Asked for his party's stance toward constitutional revision, DPJ
President Ichiro Ozawa in a press conference on April 28 said: "Does
the Constitution need to be amended urgently? I believe resolving
problems threatening the people's livelihood is far more important
at this point in time."

Hope for political realignment to break deadlock

Views on the Constitution in the ruling and opposition camps are not
monolithic.

New Komeito members delivered roadside speeches on the Constitution
in front of Shinjuku Station yesterday. Party Representative Ota
played up his party's policy of adding clauses to the Constitution,
saying: "We will reinforce the Constitution by adding new rights to
it, such as the environmental right and the right to privacy, while
upholding the three constitutional principles."

The New Komeito eyes adding new rights to the Constitution because
it fears constitutional revision being pursued only by the LDP and
DPJ. The New Komeito and its support groups are highly alarmed at
the two parties' calls for amending Article 9.

It is fortunate for the New Komeito that given ever-dropping cabinet
approval ratings, the LDP cannot afford to address Article 9 and the
preamble that concern the party's visions.

The situation is about the same with the DPJ. Establishing a standby

TOKYO 00001216 004 OF 009


force for UN missions is Ozawa's stock argument. In an interview by
the Asahi Shimbun, Maehara raised an objection to it, saying: "If
Japan is to be able to use any means, including force, as long as
there is a UN resolution, it would be a deviation from the
traditional interpretation of the Constitutional."

The chair of the DPJ Constitution Committee has been vacant since
the House of Councillors election last summer and the debate in the
party has also been stalled. Former chair Yukio Edano noted: "Public
opinion is that if the Constitution can be changed for the better,
that would be fine, but constitutional revision is not a must."

It has been one year since the national referendum law was enacted
last May. Unable to determine the numbers of directors, the two
chambers' research commissions on the Constitution have yet to begin
substantive deliberations.

Some ruling and opposition members have even begun voicing
expectations for political realignment in order to find a
breakthrough in the deadlocked discussion.

A nonpartisan group on security met on April 23 for the first time
in three years. In the session, Maehara noted: "The government has
repeatedly changed its interpretation of the Constitution without
amending the top law. Such an approach has reached its limit. Ruling
and opposition parties have to jointly discuss the matter by
transcending their boundaries."

Taro Nakayama, who chairs the LDP Constitution Council, predicted:
"Political realignment could occur. The situation like this cannot
go on forever."

(4) 2 years after U.S. military realignment accord: Dark clouds
looming over 2014 completion

TOKYO SHIMBUN (Page 2) (Full)
May 2, 2008

It has now been two years since the Japanese and U.S. governments
finalized their agreement in 2006 on the planned realignment of U.S.
forces in Japan. The U.S. military realignment in Japan shows some
progress. However, there are also difficulties when it comes to
building an alternative facility for Futenma airfield in Okinawa
Prefecture and moving U.S. Marines from Okinawa to Guam. The
realignment is slated to be completed in 2014. However, there are
dark clouds looming over that timetable for completion in six
years.

The realignment of U.S. forces in Japan is aimed at consolidating
cooperation between the Self-Defense Forces and U.S. forces and
alleviating the burden of people in Okinawa Prefecture, which is
saddled with 75 PERCENT of all U.S. military facilities.

Based on a bilateral agreement, U.S. military aircraft training has
now been transferred from three U.S. military bases, including
Kadena in Okinawa Prefecture, to six ASDF bases, such as Komatsu in
Ishikawa Prefecture and Hyakuri in Ibaraki Prefecture. In September
this year, the U.S. Yokota Air Base in Tokyo will partially return
its air traffic control of airspace to Japan.

Another realignment plan is to relocate carrier-borne fighter jets
to the Iwakuni base in Yamaguchi Prefecture. This relocation plan

TOKYO 00001216 005 OF 009


had been bogged down. In this February's mayoral election, however,
Iwakuni City's newly elected mayor, Yoshihiko Fukuda, who defeated
his predecessor opposing the relocation of carrier-borne jets to
Iwakuni, has now accepted the relocation plan. This plan is now
expected to be completed by 2014. Realignment plans that do not
accompany a large-scale move of facilities or troops are now well
under way.

Meanwhile, the government is facing difficulties in its negotiations
with Okinawa Prefecture and its base-hosting localities over the
planned relocation of Futenma airfield. Futenma relocation is
already 7-9 months behind schedule.

In March, the government started an environmental impact assessment
of the relocation site near Henoko, Nago City, as a step required
for the planned construction of an alternative facility for
Futenma.

The Japanese and U.S. governments have agreed on a plan to build a
V-shaped pair of airstrips (in a coastal area of Camp Schwab in
Nago, Okinawa Prefecture). Okinawa has asked the government to move
the planned relocation site into an offshore area. The government
has also implied that it would consider offshore relocation, with
Chief Cabinet Secretary Nobutaka Machimura remarking that the
government will make efforts while bearing it in mind so that the
issue of Futenma relocation can be settled at an early date.

However, the U.S. government will not accept any change in the
relocation plan. If Okinawa Prefecture's request is rejected, the
governor may not allow land reclamation in public waters from the
sea. The government plans to start construction work in 2010.
However, there may be a substantial delay in that schedule.

The U.S. military plans to move about 8,000 Marines from Okinawa to
Guam. The Japanese government will outlay about 600 billion yen -or
60 PERCENT of the total amount of money needed for the Guam move.
The government will shoulder up to 280 billion yen, excluding loans
and other recoverable funds. The government was under fire in the
Diet for such a huge amount of costs.

There is also an analysis suggesting the need for Japan to pay out 2
more trillion yen for the entire realignment of U.S. forces in
Japan. The Finance Ministry and the Defense Ministry are now
beginning to struggle against each other over whether or not to
earmark the realignment costs in the defense budget slot.

(5) Public opinion rejecting nuclear bombers forces cancellation of
U.S. military's B-52 flight to Iwakuni

AKAHATA (Page 1) (Full)
May 2, 2008

A B-52 strategic nuclear strike bomber was scheduled to join the air
show at the United States Marine Corps Air Station (MCAS) Iwakuni
(in Yamaguchi Prefecture) slated for May 5. It was learned
yesterday, however, that the B-52's flight to the Iwakuni base to
participate in the show has been cancelled.

Earlier in the day when Akahata asked the Ministry of Foreign
Affairs' (MOFA) Status of U.S. Forces Agreement Division about this
matter, an official of the division revealed that MOFA had been
informed by the U.S. Embassy in Japan on April 30 that the B-52

TOKYO 00001216 006 OF 009


would not fly (to Iwakuni) because of the U.S. forces' operational
reasons.

The question of the B-52's flight to Iwakuni was raised by House of
Representatives member Akira Kasai of the Japanese Communist Party
during a session on April 23 of the Lower House Committee on Foreign
Affairs and Kawai pursued Foreign Minister Masahiko Koumura, saying:
"For the victim nation of nuclear bombing, it is intolerable to see
a strategic nuclear strike bomber fly to an area near the bombsite
at Hiroshima."

This issue came as a grave shock to local residents. In addition to
civic groups, Governor Yuzan Fujita of Hiroshima Prefecture
neighboring Iwakuni City, Mayor of Hiroshima City Tadatoshi Akiba,
Mayor of Hatsukaichi City Katsuhiro Shinno and other heads of other
municipalities had filed a petition to U.S. Ambassador to Japan J.
Thomas Schieffer, Iwakuni Base Commanding Officer Col. O'Halloran,
and Foreign Minister Koumura for cancellation of the B-52's flight
to Iwakuni.

(6) International crime-prevention assistance expected to be
discussed at G-8 ministers' conference of justice and internal
affairs in June

ASAHI (Page 12) (Full)
Eve., May 1, 2008

Kenji Ogata

The outline of topics for general discussion at the upcoming
Conference in Tokyo of Ministers of Justice and Internal Affairs
from the Group of Eight (G-8) industrialized countries in June -- an
international meeting related to the G-8 Hokkaido Toyako Summit -
was learned today. The showcase of the conference will be
implementation of measures to assist countries that are not fully
ready to deal with borderless crimes by enhancing the capabilities
of their law-enforcement agencies.

The upcoming conference to discuss crime-prevention measures will
mark the 10th such meeting. Japan will host it for the first time.
The conference is to be held on June 11-13. Justice Minister
Hatoyama and National Public Safety Commission Chairman Izumi will
chair the conference.

Subjects for discussion at the conference include international
terrorism, abuse of personal identity information, such as forgeries
of passports, the need for the sharing of more information on
criminals, and child pornography. In order to advance measures
against those crimes, it is essential to give assistance to
countries other than the G-8. The conference will propose "capacity
building assistance" and seek cooperation on it.

(7) Misawa Air Base service member arrested for sexually harassing
teenager on street

YOMIURI NET (Full)
12:42, May 2, 2008

Hachinohe police in Aomori Prefecture arrested earlier today James
Littlejohn III (TN: phonetic), a 22-year-old airman based at U.S.
Misawa Air Base, on suspicion of sexually harassing (waisetsu) a
teenage girl.

TOKYO 00001216 007 OF 009

According to a police announcement, at around 3:45 a.m. today, the
airman approached a teenage girl and grabbed her from behind on a
street in Uruichi, Hachinohe City.

The airman fled from the scene by car, but about an hour later, he
was found by a Misawa police officer in the neighboring town of
Oirase.

(8) Exporting companies revise nominal exchange rate due to yen's
appreciation stronger yen: Fall in profits worth 1.2 trillion yen
attributable to strong yen

NIKKEI (Page 3) (Slightly abridged)
May 2, 2008

The yen is making big gains, as can be seen in the fact it
temporarily tested 95 against the dollar. Following the move, many
export-oriented companies are revising their nominal exchange rate
to be adopted for the term ended in March 2009. Many companies have
set the rate at 100 against the dollar, about 14 yen higher than the
previous term's level. Other companies have set it a little lower
than 100 yen. The likelihood is that listed companies will report a
decline in profits in the term ended in March as a result of the
strong yen for the first time in seven years. Changes in their
nominal exchange rates are beginning to affect the exchange market
as well.

Hardest hit by the strong yen are automakers, which are largely
dependent on North America. Most manufacturers, including Toyota and
Nissan, which have yet to release their accounts settlement, will
likely set the nominal rate at around 100 against the dollar. A
decline in the value of operating profits of seven leading
manufactures (Toyota, Honda, Nissan, Mazda, Mitsubishi, Fuji Heavy
Industries and Suzuki) as a result of the strong yen has reached
approximately 1.2 trillion yen. Six companies excluding Suzuki are
expected to suffer a double-digit decline in operating profits.

Honda is expected to record a decline of 303 billion yen in
operating profits as a result of setting a nominal exchange rate at
100 against the dollar. Vice President Kondo said, "The number of
units sold throughout the world, mainly in developing countries,
will mark an increase. Even so, it would be impossible to make up
for the impact of the sharp appreciation of the yen with that."

In other industrial sectors, TDK's group operating profits for the
term ended in March are expected to decline for the first time in
seven terms. This is due to an exchange loss of 30 billion yen.
Ricoh has also marked a decline in operating profits worth
approximately 20 billion yen due to the revised exchange rate.
Vis-a-vis the euro, the company has set the rate at 160, the level
similar to that actually adopted in the previous term (about 161
yen). However, Director Miura said, "The future of the European
economy is also unclear. It is hard to expect a weaker yen and
stronger euro trend." Chances are that it would be difficult to make
up for the appreciation of the yen against the dollar with the
depreciation of the yen against the euro as before.

However, the strong yen is a boost for companies that import raw
materials from abroad. Oji Paper Co., which hopes to report an
increase in current profits in the March term, has set the rate at
102. President Shinoda noted, "The cost of the procurement of raw

TOKYO 00001216 008 OF 009


materials has dropped thanks to the appreciation of the yen. This
could serve as a positive factor for the company's business
performance." However, the downside of the strong yen is greater in
terms of corporate earnings as a whole.

Some companies are overcoming the adverse impact of the yen's
appreciation. Komatsu has suffered a fall in profits worth 43
billion yen as a result of the strong yen. However, it can cancel
out the loss with demand from emerging countries, such as China. Its
operating profits for the term ended in March are expected to mark
an 8 PERCENT increase, compared with the preceding term. This is
ascribable to its effort to spread revenue bases worldwide in a
balanced manner. Other export-oriented companies are expected to
further accelerate their move to develop markets in emerging
countries.

(9) Expenses needed to implement DPJ-proposed polices to exceed 20
trillion yen -- increase due to abolition of provisional gas tax
rate

NIKKEI (Page 2) (Abridged slightly)
April 30, 2008

Estimates for expenses needed to realize the policies proposed by
the Democratic Party of Japan (DPJ) have expanded to 20 trillion
yen. The reason is not just because it calls for abolishing the
provisional gas tax rate and adopting a package of emergency
economic measures. The DPJ also has proposed many pork-barrel-type
policies. It has decided to expand sectors eligible for an
individual income compensation plan for farmers that had been
incorporated in its manifesto (campaign promises) issued for the
Upper House election last year to now cover the livestock, forestry
and fisheries sectors, as well. Even some party members are
concerned about how such fiscal resources would be secured.

The manifesto, which estimates major policy expenses to be 15.3
trillion yen, mentions that funds are, in principle, to be drawn
from the abolition of system of special budget accounts. It also
includes a goal of moving the primary balance of the central and
local governments into the black by fiscal 2011.

Fiscal resources for implementing the DPJ's policy proposal have
further expanded due to additional policy proposal the party made
after the Upper House election. The estimated annual drop in
revenues due to the abolition of provisional gas tax rate for
special-purpose road-construction revenues would reach approximately
2.6 trillion yen. The party's proposed package of emergency economic
measures would cost 3.5 trillion yen. The DPJ says that it would
cover revenue shortfalls following the abolition of the provisional
gas tax rate by squeezing the state's road budget. However, it has
given up on a plan to prepare a bill to prohibit public money from
being spent for road-related public utility corporations. It is thus
finding it difficult to map out a concrete plan that would come up
with the needed fiscal resources.

The DPJ plans to make a freeze on the present consumption tax rate a
campaign pledge for the next Lower House election. With an eye on
the next general election, the party appears to be playing up only
its rosy policies, while avoiding touching on policies that entail
an increased fiscal burden. The party will shortly map out an
Agriculture, Fisheries, Farming, Fishing and Mountain Villages
Revitalization Vision. The envisaged initiative is expected to

TOKYO 00001216 009 OF 009


mention that the coverage of its individual income compensation
scheme intended to compensate gaps between production costs and
market prices with tax money will be extended to sectors other than
farming, such as the livestock, forestry and fishing industries.
Expenses needed to implement this policy are estimated at
approximately 250 billion yen.

The party included in its proposed set of emergency economic
measures a policy intention of using a so-called hidden slush fund
that the government allegedly has, such as surpluses from the
special foreign exchange funds account. President Ichiro Ozawa also
advocated using the balance brought forward from the special road
account as a regional measure to assist local governments suffering
from revenue shortfalls once the provisional tax rates are scrapped.
The DPJ thus plans a two-step strategy of making ends meet using
the hidden slush fund for the time being and then correcting the
waste in the use of tax money over the mid- to long term.

DPJ policy and necessary expenses

Policy Expenses needed Measures to secure funds
Manifesto for Upper House election
? Using the consumption tax for the minimum guaranteed pension
payout system
? Create a child allowance
? Individual income compensation for farmers
? Abolishing expressway tolls 15.3 trillion yen Eliminating waste,
by adopting a package subsidy offering system, rooting out
bid-rigging practices, cutting the cords of golden parachute
(amakurari practice), abolishing special budget accounts and ending
the income tax deduction for spouse.
Bills submitted after Upper House election
? Abolishing provisional tax rates, such as the gas tax rate
? Assisting gas stations 2.6 trillion yen
ASTERISK

50 billion yen Squeezing the state budget for roads, considering
measures to deal with global warming, using balance brought forward
from the special road account
Improving labor conditions for care-givers 90 billion yen Using
surpluses from national burdens of nursing-care subsidy
Subsidizing medical expenses for hepatitis patients 28 billion yen
The government has already secured 21 billion yen.
Emergency economic measures (including offering 2 trillion yen to
local governments, measures for a shortage of doctors) 3.5 trillion
yen Slashing costs of public works and reviewing the placing of
project orders with public utility corporations at a relatively
higher prices. Using the so-called buried funds in special accounts.

Income compensation for the livestock, forestry and fisheries
industries. 250 billion yen Streamlining special public corporations
and abolishing special accounts.

(N.B. Some of figures for necessary expenses are estimates.)
ASTERISK denotes a decrease in revenues.

DONOVAN

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