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Cablegate: Japanese Morning Press Highlights 05/09/08

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

SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 05/09/08


Index:

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

Visit of Chinese President Hu to Japan:
4) Deputy Secretary of State Negroponte, arriving in Japan, welcomes
progress in Japan-China relations (Tokyo Shimbun)
5) President Hu Jintao in speech at Waseda University stresses
future-oriented relations between Japan, China, while touching on
the history issue (Tokyo Shimbun)
6) METI issues trade-barrier report that takes China to task for its
trade policy, including restrictions on resource exports (Yomiuri)


7) Japan has asked ROK's Lee administration to broker meeting in
South Korea between the Yokotas and their granddaughter, daughter of
Megumi Yokota (Yomiuri)

8) UN special envoy says PKO efforts in Sudan by Japan's SDF would
be welcome (Asahi)

9) Foreign Minister Koumura, Australian Foreign Minister Smith
discuss startup of trilateral talks with United States (Tokyo
Shimbun)

10) Non-partisan Diet members study group on depleted-uranium issue
is launched (Tokyo Shimbun)

Defense affairs:
11) Basic law on use of space for defense use to clear the Diet
today (Asahi)
12) Defense Ministry postpones reform process after Ishiba's
proposal hits a snag with the Prime Minister's Official Residence
(Yomiuri)
13) Tokyo Prosecutors throwing the book at defense procurement fixer
Akiyama, including tax evasion (Tokyo Shimbun)
14) Court martial of Iwakuni Marine accused of gang rape finds
defendant guilty of "unlawful sex without consent" (Yomiuri)

Political scene:
15) Former Prime Minister Koizumi: If a Lower-House election were to
be held now, we would lose up to 150 seats! (Yomiuri)
16) Upper House panel to reject today bill amending Road
Construction Revenues Special Exemption Law (Tokyo Shimbun)
17) Cabinet decision on May 13 will eliminate contradiction in Prime
Minister's policy by limiting use of dedicate road-tax revenues to
one year (Tokyo Shimbun)
18) With Fukuda cabinet popularity plunging in the polls to record
lows, Democratic Party of Japan (DPJ) is changing Diet strategy to
engage the ruling parties (Tokyo Shimbun)
19) DPJ will attack Fukuda administration for lack of policies,
homing in on such issues as medical care for the elderly and the
pension mess (Nikkei)

20) Toyota expects a 30 PERCENT drop in its current profits due to
yen appreciation, high cost of raw materials, and other factors
(Asahi)

Articles:


TOKYO 00001253 002 OF 012


1) TOP HEADLINES

Asahi, Mainichi & Sankei:
Toyota's annual profit likely to drop for the first time in nine
years

Yomiuri:
Tokyo found to have asked Seoul to help arrange meeting between
abductee Megumi Yokota's parents and her daughter

Nikkei:
MOF mulling ending state contributions to employment insurance with
aim of constraining social welfare budget

Tokyo Shimbun:
Akiyama found to have collected 500 million yen from defense firms;
Prosecutors investigating, envisioning possible tax evasion

Akahata:
JCP makes appeal for joint action to scrap medical service system
for elderly

2) EDITORIALS

Asahi:
(1) New Russian president needs to stand on his own two feet
(2) Cabinet members need to lead decentralization of authority

Mainichi:
(1) Russia's new political structure: Can it lead to open country?
(2) Budget compilation for fiscal 2009 critical in terms of
financial recovery

Yomiuri:
(1) Soaring coal prices: Can domestic-produced coal again grab
spotlight?
(2) Disaster in Burma: Why does junta refuse humanitarian aid?

Nikkei:
(1) We hope international assistance to Burma will lead to
democratization
(2) Danger of two-headed political structure in Russia

Sankei:
(1) Disaster in Burma: What is the junta doing?
(2) Antarctic observation more meaningful

Tokyo Shimbun:
(1) Skyrocketing oil prices: Invest in energy-saving projects
(2) Burma's junta pays little attention to the people

Akahata:
(1) National peace march calling for abolition of nuclear weapons
marks 50th anniversary this year

3) Prime Minister's Official Residence (Kantei)

Prime Minister's schedule, May 8

NIKKEI (Page 2) (Full)
May 9, 2008


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10:11
Attended a Grand Cordon award ceremony at the Imperial Palace.

10:58
Returned to his official residence.

13:25
Attended an Order of Golden Silver Star award ceremony at the
Imperial Palace.

14:02
Returned to his official residence.

15:15
Met Rengo (Japanese Trade Union Confederation) President Takagi at
the Kantei, in the presence of Health, Labor and Welfare Minister
Masuzoe, Deputy Chief Cabinet Secretary Futahashi, and Assistant
Deputy Chief Cabinet Secretary Saka. Masuzoe stayed on.

16:25
Attended along with Chinese President Hu Jintao the opening ceremony
of the Japan-China Youth Friendship Exchange Year held at Waseda
University, followed by a Japan-China youth exchange event.

17:40
Returned to his official residence.

18:24
Met Deputy Foreign Minister Sasae.

19:13
Along with his wife, hosted a welcome dinner party for President
Hu.

21L09
Returned to his official residence.

4) U.S. Deputy Secretary of State Negroponte hails progress in
Japan-China relations

TOKYO SHIMBUN (Page 2) (Full)
May 9, 2008

Administrative Vice Foreign Minister Mitoji Yabunaka late yesterday
met with visiting U.S. Deputy Secretary of State John Negroponte at
his ministry's Iikura State Guest House in Azabudai, Tokyo, and
briefed him on the details of the Japan-China summit on May 7.
Negroponte said: "On the part of the United States, we welcome the
progress in Japan-China relations."

Both Yabunaka and Negroponte confirmed that Japan and the U.S. would
continue to work in close cooperation to resolve the North Korean
nuclear and abduction issues.

5) Chinese president emphasizes future-oriented relationship in
speech at Waseda University, refers to Japan's wartime aggression

TOKYO SHIMBUN (Page 1) (Full)
May 9, 2008

Visiting Chinese President Hu Jintao delivered a speech at Waseda
University before 900 students yesterday. In the speech, Hu said

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that Japan-China relations "are now at the starting point of a new
chapter of history and are set to develop further," emphasizing the
importance of promoting a future-oriented relationship and exchanges
between young peoples of the two countries. He also stressed that
China will aim for peaceful development, remarking: "China has taken
a defensive national defense policy and has not been involved in an
arms race. (Our progress) will pose no threat to any country."

President Hu talked about how China has developed in the 30 years
since it opted for a reform and open-door policy. He then expressed
his gratitude for Japan's assistance to China, saying: "Japan's yen
loans to China have greatly contributed to modernizing China through
infrastructure building, environmental protection, and energy
development."

Hu also referred to Japan's past military aggression for the first
time since he arrived in Japan on May 6: "The Japanese military's
invasion of China in the past brought about enormous misfortune to
the Chinese people and also harmed the Japanese people." He added:
"China does not forget history not because it continues to harbor
enmity (against Japan) but because it wants to move into the future
while learning from the past."

In reference to the fact that 3,000 Japanese young people were
invited to China in 1984, Hu said: "The seeds planted in our younger
days will have a lot to offer throughout our lives. We must hand
down friendship through generations." As part of such efforts, he
revealed plans to invite 100 students at Waseda University to China
this year.

6) METI seeks to constrain China's trade policy in Unfair Trade
Policies Report, pointing out its restriction on resource exports

YOMIURI (Page 9) (Excerpts)
May 9, 2008

The Ministry of Economy, Trade and Industry (METI) yesterday
released its 2008 Report on Unfair Trade Policies. METI has come up
with a stance of more carefully monitoring the movements of China,
and the report in Chapter 1 for the first time takes up China - and
not the U.S. - unlike previous reports. Japanese companies are
actively engaging in trade and investment in China. In particular,
the report seeks to constrain that country's resource export
restriction and unclear investment rules.

Citing a sharp rise in domestic demand as a reason, the Chinese
government is restricting exports of coke, a material for steel, and
rare metals, which are indispensable for home electronics and parts
for cell phones.

Noting that the World Trade Organization (WTO) approves export
restrictions on the condition that domestic production and
consumption are restricted, the report says that China's export
restriction is suspected of being a violation of the WTO rule,
because its production of coke increased from 110 million tons in
2002 to 280 tons in 2006.

The market price in Tokyo of cold-rolled steel, which is widely used
for home electronics and construction materials, is hovering at
around 108,000 yen per ton, 30 PERCENT higher than the previous
year's level, due in part to export restrictions on coke. METI is
increasingly concerned about the impact of the export restriction on

TOKYO 00001253 005 OF 012


coke with one official noting, "If the price of steel materials
continues to rise, it could have an adverse effect on the economy."

Among rare metals, China's permission of exports of an ore that is
called rare earth, has decreased from 57,000 tons in 2001 to 44,000
tons in 2007.

Japan depends on China for 90 PERCENT of its demand for rare earth.
The report warns that China's export restriction on that material
could incur a short supply in Japan.

The report proposes settling the issue through a dialogue. The
government intends to strongly urge China to correct the situation
at such venues as ministerial or summit meetings.

7) Tokyo found to have asked Seoul to arrange meeting between
abductee Megumi Yokota's parents and their granddaughter

YOMIURI (Top play) (Excerpts)
May 9, 2008

The Japanese government was found to have asked the South Korean
government to act as an intermediary to set up a meeting in South
Korea between abductee Megumi Yokota's daughter, her former husband,
and her parents. The Japanese side reportedly indicated a plan to
return to North Korea the remains of another person provided by
North Korea as those of Megumi. These details were revealed by a
source connected to Japan-South Korea relations yesterday. Behind
this move by Tokyo is apparently its judgment that in order to break
the current stalemate in Japan-North Korea talks on the abduction
issue, Japan would need to offer a much bolder proposal to the North
Korean side.

According to the source familiar with Japan-South Korea relations,
when Special Advisor to the Prime Minister Kyoko Nakayama visited
Seoul on April 25, she asked a high-level official of the South
Korean government to realize this sort of meeting.

South Korea and North Korea have several occasions in a year for
South Korean abductees and their relatives to meet in South Korea as
part of the reunion project for separated family members between two
Koreas. Nakayama suggested using this family reunion occasion to set
up a meeting between Shigeru Yokota (75) and his wife Sakie (72),
Megumi's former husband Kim Young Nam (47), and her daughter Kim Hye
Gyong (20).

8) U.N. official welcomes SDF mission in Sudan

ASAHI (Page 4) (Full)
May 9, 2008

OSLO-Ashraf Qazi, the special representative of the United Nations
secretary general for Sudan, responded to an Asahi Shimbun
reporter's interview on May 7 in Oslo. The Japanese government is
considering sending the Self-Defense Forces for U.N. peacekeeping
operations in the southern part of Sudan. In this regard, Qazi said
he would like the Diet to discuss the matter. "If Japan comes," he
said, "we will fully welcome it."

Qazi also represents the U.N. Mission in Sudan (UNMIS), a PKO body
following a north-south peace agreement in Sudan. "The SDF is
experienced in PKO activities and is highly capable," Qazi said.

TOKYO 00001253 006 OF 012


Earlier in the day, Qazi met with Parliamentary Foreign Secretary
Yasuhide Nakayama. According to Nakayama, Qazi asked Japan to send
an SDF engineering unit to Sudan. Nakayama quoted Qazi as saying:
"The PKO troops currently working in Sudan do not have a high level
of technical know-how for infrastructure construction, so we would
strongly like to ask Japan to send SDF troops."

The Defense Ministry remains cautious about sending SDF members to
Sudan for security and other reasons. "Once in a while, there are
clashes and crimes," Qazi said. "But," he added, "the situation is
improving." The UNMIS is made up of about 10,000 troops from 67
countries as of March this year.

9) Japan-U.S.-Australia strategic dialogue to be held

TOKYO SHIMBUN (Page 2) (Full)
May 9, 2008

Foreign Minister Masahiko Koumura held a meeting yesterday with
visiting Australian Foreign Minister Stephen Smith at the Foreign
Ministry. As a result, the two foreign ministers agreed to hold a
Japan-U.S.-Australia cabinet-level strategic dialogue timed with the
G-8 foreign ministerial to be held in Kyoto in late June. In the
planned strategic dialogue, the three countries will discuss close
cooperation in security and the fight against terrorism.

They also confirmed to aim at settling the controversial research
whaling issue diplomatically.

10) DU study group launched

TOKYO SHIMBUN (Page 2) (Full)
May 9, 2008

A group of lawmakers yesterday launched a supra-partisan depleted
uranium (DU) study group. DU shells, which were used during the Iraq
war, are suspected of causing cancer and leukemia.

The inaugural meeting was attended by 17 ruling and opposition party
members, including Asahiko Mihara and former Foreign Minister Yoriko
Kawaguchi from the Liberal Democratic Party, as well as Social
Democratic Party head Mizuho Fukushima. The group will consider the
appropriateness of banning the use of DU shells through lectures by
experts and exchanges of views among members.

In the session, a lecture was given by Dirk van der Maelen, a
proponent of legislation banning DU weapons that was adopted by the
Belgian parliament. Maelen said: "You might be concerned about your
relationship with the United States, but I believe that armed with a
pacifist Constitution, Japan can give advice (on banning the use of
DU weapons)."

11) Japan to lift ban on space activities for defense

ASAHI (Page 1) (Abridged)
May 9, 2008

The ruling coalition of the Liberal Democratic Party and New Komeito
agreed yesterday with the leading opposition Democratic Party of
Japan (Minshuto) to present a joint legislative measure to the Diet
in its current session, a Diet member-proposed "Basic Law on Outer
Space." The legislation is intended to lift Japan's self-imposed ban

TOKYO 00001253 007 OF 012


on the use of outer space for defense. A strategic task force will
be set up in the cabinet under the political initiative for the
unified promotion of space-related policy measures. The House of
Representatives Cabinet Committee will enter into deliberations on
the bill today and take a vote within the day. The bill is expected
to clear the Diet during the current session.

The government has so far made it a principle to use space for
nonmilitary purposes only, in line with a 1969 Diet resolution on
the peaceful use of space. The legislation purports to "promote
space development and exploitation for Japan's national security,"
and will allow Japan to use space for "nonaggressive" defense
purposes as approved by the Space Treaty. The legislation will pave
the way for the SDF to introduce government-prohibited satellites,
including high-performance reconnaissance satellites. The SDF will
also be allowed to possess advanced missile surveillance satellites
(early warning satellites).

The SDF, in its use of space, has so far been allowed to utilize
commercial-off-the-shelf technologies only. In 1998, North Korea
test-fired ballistic missiles. After that, the government launched
intelligence-gathering satellites for disaster planning purposes.
Their resolution has been held down to the level of commercial
satellites.

Parliamentary debate will now likely focus on how far to allow the
use of space for defense and what to do so in order to avoid
unnecessarily expanding the scope of confidentiality for defense
purposes.

12) Defense Ministry forgoes reform plan presentation

YOMIURI (Page 4) (Abridged)
May 9, 2008

The government held a meeting of its Defense Ministry reform panel
yesterday at the prime minister's office, with Chief Cabinet
Secretary Machimura presiding. In the meeting, the Defense Ministry
was to brief the panel on its plan to reorganize the Defense
Ministry, involving the Self-Defense Forces. Defense Minister Ishiba
has advocated integrating the Defense Ministry's bureaucracy and the
SDF's brass into a reorganized body. However, there are strong
objections from within the Defense Ministry. The Defense Ministry
will present its reform plan to the panel at its next meeting to be
held late this month.

Ishiba plans to reorganize the Defense Ministry's internal bureaus
and the SDF's staff offices into a body for three functionalities:
1) defense buildup; 2) operational planning; and 3) Diet affairs and
public relations. The Ground, Maritime, and Air Self-Defense Forces'
respective staff offices will be substantially downscaled. The
Ishiba plan will separate the GSDF, MSDF, and ASDF chiefs of staff
from the chain of command and will have them serve as advisors to
the defense minister. The defense minister will directly command the
three SDF services.

At the reform panel meeting on the eighth as well, there were
negative views expressed about the Ishiba proposal.

13) Akiyama, director of defense organization, raised 500 million
yen from arms corporations; Tokyo District Public Prosecutors Office
also suspects tax evasion

TOKYO 00001253 008 OF 012

TOKYO SHIMBUN (Top play) (Excerpts)
May 9, 2008

Naoki Akiyama, 58, director of the Japan-U.S. Center for Peace and
Cultural Exchange, a Tokyo-based corporation including lawmakers
with vested interests in the defense industry, raised over 500
million yen mainly from defense companies in about a three-year
period, a connected source revealed. During this period, Akiyama
declared only tens of millions of yen in income. The Tokyo District
Public Prosecutors Office special investigation squad seems to be
conducting investigations suspecting that he has violated the Income
Tax Law (tax evasion).

According to the source, Akiyama raised funds by using bank accounts
in the names of such corporations as Addback International Corp. in
Los Angeles and the Council for National Security (CNS), a nonprofit
corporation based in Washington. Akiyama serves as an advisor to
Addback's Japan office.

Major Japanese and American arms manufactures and a dozen or so
trading firms transferred a total of some 300 million yen in
consultant fees to those accounts.

In addition, part of membership fees and donations to the
association by Japanese and American arms corporations was funneled
to Addback. It has already been found that Akiyama received in
October 2006 approximately 30 million yen from defense equipment
trader Yamada Corp. Including that amount, Akiyama is believed to
have raised over 500 million yen in total.

14) U.S. Marine found guilty in Iwakuni court martial

YOMIURI (Page 35) (Full)
May 9, 2008

In the case of an alleged gang rape of a 20-year old woman in
Hiroshima City last October by four U.S. Marines (ages ranging from
20 to 39) stationed at MSCA Iwakuni, a U.S. military court martial
yesterday found the 20-year old Marine guilty of "committing an
unlawful sex act without consent (doui-no-nai fuhou-na sei-koui).
The sentencing will be handed down on May 9.

15) Former Prime Minister Koizumi: If Lower House election is held
now, the LDP will lose 150 seats

YOMIURI (Page 2) (Full)
May 9, 2008

Former Prime Minister Junichiro Koizumi, a member of the ruling
Liberal Democratic Party, dined last night with young Lower House
members, including Yaichi Tanigawa, parliamentary secretary for
agriculture, forestry and fisheries, at a Japanese restaurant in
Tokyo. Koizumi indicated his view that the next House of
Representatives election should be put on the back burner, saying:
"If the election is held now, we will lose 100 seats, or as many as
150 seats. It would be better for us to wait until next year."

Around that time, a dinner party welcoming Chinese President Hu
Jintao was being held at the Prime Minister's Official Residence
(Kantei). According to one participant in the party, Koizumi
explained his decision to stay away from the party: "It would be

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better that I not go there."

16) Upper House panel to reject today bill amending Road
Construction Revenues Special Exemption Law

TOKYO SHIMBUN (Page 2) (Full)
May 9, 2008

In a meeting yesterday of its directors, the House of Councillors
Financial Affairs Committee decided to take a vote on a bill
amending the Construction Revenues Special Exemption Law, intended
to reinstate the tax revenues for road construction and maintenance
for 10 years. The outlook is that the bill will be rejected by the
opposition camp, which holds the majority of the Upper House seats.
The said bill is expected to be voted down in an Upper House plenary
session on May 12. Based on Article 59 of the Constitution, the
government and ruling parties intend to hold a revote on the
legislation in a House of Representatives plenary session and enact
it on the 13th by their two-thirds majority overriding vote.

In this connection, the ruling and opposition parties held yesterday
a meeting of their Diet affairs committee chiefs. In it, the
opposition demanded that concentrated deliberations on the road
issue be held in the Lower House Budget Committee or Land and
Transport Affairs Committee at the attendance of Prime Minister
Yasuo Fukuda. The ruling camp, however, just replied: "Holding
deliberations before the 13th is impossible. We accept the
request."

Prime Minister Fukuda criticizes DPJ's postponement of voting

When asked by reporters last evening about the Democratic Party of
Japan's decision to take a vote on a bill amending the Construction
Revenues Special Exemption Law, Prime Minister Yasuo Fukuda
criticized the DPJ for having put off taking a vote on the bill,
saying: "I wonder whey they did not make that decision earlier. I
want them to make the decision when one is needed."

17) Special road law amendment bill to mention that the
implementation of the law is for one year only: Inconsistency with
government decision to free up road tax revenues to be adopted at
cabinet meeting on the 13th dissolved

TOKYO SHIMBUN (Page 1) (Excerpts)
May 9, 2008

The government plans to adopt at a cabinet meeting a policy of
shifting special-purpose road construction revenues to the general
account starting in fiscal 2009. In this connection, it yesterday
decided to mention in a bill amending the Road Construction Revenues
Special Exemption Law aimed at reinstating special-purpose road
construction revenues for 10 more years starting in fiscal 2008,
that the implementation of the law is to be limited to one year.

Opposition parties and some ruling party members had pointed out
that the amendment bill is inconsistent with the decision by the
government and the ruling parties to free up road tax revenues
starting in fiscal 2009.

However, since the amendment bill is to serve as the basis for
distributing special subsidies worth approximately 700 billion yen
to be offered to local governments in fiscal 2008, any delay in its

TOKYO 00001253 010 OF 012


passage would affect local finances.

For this reason, the government had decided to dissolve the
inconsistency at a cabinet meeting instead of giving priority to
early passage of the bill, which would necessitate an amendment
later.

18) DPJ trying to boost opportunities for debate with Prime Minister
Fukuda, shifting strategy

TOKYO SHIMBUN (Page 2) (Full)
May 9, 2008

The main opposition Democratic Party of Japan (DPJ) has now begun
intentionally increasing opportunities to hold debate with Prime
Minister Yasuo Fukuda. The DPJ had previously placed priority on
expressing its anger by such means as boycotting a plenary session
of the House of Representatives, which had been held to take a
revote on a bill amending the Special Taxation Measures Law.
Following the plummeting support rates for the Fukuda cabinet,
however, the largest opposition party has now taken a strategy of
attacking the government through debate.

DPJ Secretary General Yukio Hatoyama met yesterday with Lower House
Speaker Yohei Kono. Referring to the fact that DPJ lawmakers had
tried to prevent Kono from entering the plenary hall where the
second vote on the bill was taken, Hatoyama offered an apology to
Kono, saying: "Our action was excessive."

The outlook is that although the ruling camp will hold a revote on a
bill amending the Construction Revenues Special Exemption Law in the
Lower House on May 13, the DPJ will not put any physical resistance
but oppose it.

The DPJ has gone along with the ruling coalition's proposal of
taking a vote on the bill in the Upper House Financial Committee on
May 9 on the grounds that Fukuda will attend the session. The party
also demanded that concentrated deliberations be held in the Lower
House Budget Committee or Land and Transport Affairs Committee.

On the back of the DPJ's attempt to boosting opportunities to hold
debate with the prime minister, there is the DPJ's aim to attack
Fukuda, who has been suffering from the low public support rates for
him and his cabinet, at Diet deliberations so that the public can
see his incapability.

In particular, the legislation is good means of attacking the prime
minister because its enactment goes against the decision by the
government and ruling coalition that the tax revenues earmarked for
road construction will be shifted to the general account starting
2009.

Deputy President Naoto Kan stressed at a press conference yesterday:
"I want to hear an explanation by the prime minister on consistency
(between the decision by the government and ruling camp and the
revision bill)."

19) DPJ ready to underscore government's lack of policy in Diet
deliberations

NIKKEI (Page 2) (Excerpts)
May 9, 2008

TOKYO 00001253 011 OF 012

The Democratic Party of Japan (DPJ) has agreed to take a vote on a
bill amending the Special Law on Financial Resources for Highway
Construction Projects in the House of Councillors. The main
opposition party is now poised to pursue the government and the
ruling coalition in Diet deliberations. There is a lot of material
for attack, such as the unpopular health insurance system for people
aged 75 or older and the pension record-keeping fiasco. Given this,
the DPJ has concluded it would be wiser to underscore the Fukuda
administration's lack of policy in Diet debate. The party has also
decided not to submit a censure motion against Prime Minister Fukuda
at an early date out of fear that public criticism might be directed
toward the opposition bloc. Such a policy switch also reflects a
judgment that its confrontational stance has reached an impasse.

In a meeting of the DPJ's Health, Labor and Welfare Department
yesterday, Acting Policy Research Council Chairman Akira Nagatsuma
and others demanded that the ministry publicize changes in the
burden of premium payments since the new system for very old
patients was introduced. A representative from the Ministry of
Health, Labor, and Welfare reiterated: "It is impossible to given a
sweeping answer." In reaction, criticism erupted from other
participant lawmakers.

The four opposition parties -- the DPJ, the Japanese Communist
Party, the Social Democratic Party, and the People's New Party --
have decided to jointly submit a bill calling for abolishing the new
insurance system by the end of this month. The DPJ has set the time
for the abolition at April in 2009. It has also outlined a bill
designed to cancel the automatic deduction of insurance premiums
from pension benefits immediately after the said system is
implemented. The DPJ intends to disclose the details of the bill in
policy talks of the opposition parties to be held possibly on May
13.

On the pension mess, the DPJ has demanded that the ministry present
data on details about unidentified pension accounts. It is set to
attack the government, keeping in mind even the possibility of
exercising Diet members' rights to investigate state affairs.
Regarding the government-submitted basic bill reforming the national
civil service system, on which deliberations will start at the House
of Representatives today, the DPJ is positive about holding
negotiations on revising the bill. It apparently intends to
demonstrate its presence in Diet deliberations.

In an executive meeting of the DPJ on the evening of the 7th, Upper
House Chairman Azuma Koshiishi said about the bill amending the
special law related to highway construction: "The Upper House is
willing to take a vote." He apparently fears that the view that the
Upper House is unnecessary might gain influence if the Upper House
allows the government to take an override vote on the bill in the
Lower House again.

Some DPJ members are also concerned about the public might react to
the party's confrontational stance while continuing to refuse
deliberations.

20) Toyota foresees 30 PERCENT drop in profit in term ending in
March 2009 due to appreciation of yen, sharp rise in raw materials

ASAHI (Top Play) (Full)
May 9, 2008

TOKYO 00001253 012 OF 012

Toyoto Motors yesterday released a projection for its consolidated
financial settlement for the term ending in March 2009. The report
says that its group operating profits will drop by 30 PERCENT . The
significant profit fall is attributable to the strong yen and the
sluggish North American market, triggered by the financial crisis
that originated in the U.S., and high raw-material prices. The
projected setback of Toyota, which has been enjoying robust sales,
indicates that the Japanese economy is a crucial juncture.

"The trend has changed," says president

Meeting the press, President Watanabe analyzed the business
performance of his company for the next business year, noting, "The
U.S. economy is slowing. The economic situation in Europe is not
favorable. I think that the trend of the global economy has
changed."

Toyota projects its sales to be 25 trillion yen, down 4.9 PERCENT ,
operating profits, indicating profits in the main line of business,
to be 1.6 trillion yen, down 29.5 PERCENT , and profits of the term
to be 1.25 trillion yen, down 27.2 PERCENT , from the preceding
term. The company expects drops in sales and operating profits for
the first time in nine years since the term ended in March 2000. The
margin of the drop in profits (670.3 billion yen) will be the
largest since the term ended in 1099, when it adopted the U.S.
accounting standards. It is estimated to suffer a drop in profits of
the term for the first time in seven terms.

The carmaker made the estimate based on the assumption that the
average exchange rates of the yen against the dollar will be 100 yen
for the term ending in March 2009, compared with the estimated rates
of 114 yen for the term ending in March 2008. Exchange fluctuations
alone are expected to dent operating profits by 69 billion yen.

The projection underscored that the Japanese economy is facing a
backlash, which even Toyota, a company that represents Japanese
industry, cannot resist. Concerns about a decline in business
performances will likely spread widely, centered on the
export-oriented industry. Honda Motors also projects a significant
drop in profits. Companies affiliated with automakers, such as parts
manufactures, are also expected to mark a decline in profits.

DONOVAN

© Scoop Media

 
 
 
 
 
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