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Cablegate: Japanese Morning Press Highlights 05/13/08

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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;
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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 05/13/08

Index:

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

G-8 Labor Ministerial:
4) G-8 labor ministers meeting in Niigata agree on need to balance
environment and job expansion, seek better treatment of working poor
(Nikkei)
5) Labor minister in G-8 meeting expresses concern about impact of
subprime loan mess and high oil prices on jobs (Yomiuri)

6) Senior MOFA official says that Japan's evaluation of nuclear
documents released to U.S. official by DPRK will depend on their
contents (Yomiuri)

7) "Fukuda vision" for Japan's greenhouse gas reduction already
myopic, with postponement of setting a mid-term reduction target
(Nikkei)

8) Cabinet debates establishment of a consumer affairs agency, as
advocated by Prime Minister Fukuda (Nikkei)

Political agenda:
9) Road-related legislation to be re-voted and adopted by the Lower
House today (Asahi)
10) Talks between ruling and opposition camps on road-revenue issue
difficult to restart (Yomiuri)

11) Fukuda exhorts junior lawmakers to support his plan to turn
dedicated gas tax into general revenues (Nikkei)
12) Democratic Party of Japan is already readying its campaign
platform for the next Lower House election (Nikkei)
13) DPJ's Kan is not ruling out an Upper House censure motion
against the prime minister if he does not scrap the system that
charges the elderly for medical care (Yomiuri)
14) Where has the LDP's "control tower" disappeared to? (Sankei)
15) Cooperation with former postal rebel Hiranuma, aiming at
creation of new anti-LDP party, is being welcomed by DPJ Secretary
General Hatoyama (Yomiuri)

Articles:

1) TOP HEADLINES

Asahi, Mainichi, Yomiuri, Nikkei, Sankei, Tokyo Shimbun, and
Akahata:
Quake measuring 7.8 in Sichuan kills more than 8,700 in China; Over
10,000 injured; 900 middle school students trapped under rubble

2) EDITORIALS

Asahi:
(1) Japanese government must try to convince Burmese junta to accept
international aid
(2) Food export controls must be reduced

Mainichi:
(1) Japan Post Bank must practice modesty in housing loan business
(2) Political decision necessary to promote cluster bomb ban treaty


TOKYO 00001296 002 OF 010


Yomiuri:
(1) Health insurance for elderly needs clarifying
(2) Broad-based agreement essential in transferring naming rights

Nikkei:
(1) Japan must demonstrate greater commitment as
environment-oriented country
(2) Citigroup under pressure to reduce assets

Sankei:
(1) Lake Toya Summit: Are the figures pragmatic?
(2) Childrearing consultation services must be improved

Tokyo Shimbun:
(1) Microsoft gives up Yahoo takeover bid
(2) Stricter requirements for owning shotguns needed

Akahata:
(1) Deployment of nuclear-powered aircraft carrier: Calls for local
referendum must be answered

3) Prime Minister's Official Residence (Kantei)

Prime Minister's schedule, May 12

NIKKEI (Page 2) (Full)
May 13, 2008

09:16
Met with Vice Health Minister Erikawa and Health Insurance Bureau
Director-General Mizuta at Kantei.

10:08
Attended the 60th anniversary ceremony on the foundation of the
maritime safety system held at Palace Hotel.

11:14
Met at Kantei with Deputy Chief Cabinet Secretary Iwaki, House of
Councilors member Hirofumi Nakasone. Nakasone remained.

11:52
Met with Deputy Chief Cabinet Secretary Futahashi.

12:38
Met with Vice Foreign Minister Yabunaka, Deputy Foreign Minister
Sasae, and Asian and Oceanian Affairs Bureau Director-General Saiki.


13:06
Attended a liaison meeting of the government and the ruling
parties.

13:42
Met with former Prime Minister Nakasone at Sabo Kaikan Hall in
Hirakawa-cho.

14:21
Met at Kantei with House of Representatives member Kenichi Mizuno of
the "Forum to Support the Fukuda Proposal and Realize Moving the
Revenues for Road Projects into the General Account" and others.
Afterwards, met with State Minister in Charge of Consumer
Administration Kishida.

TOKYO 00001296 003 OF 010

15:21
Met with Ambassador to Bosnia and Herzegovina Motai. Afterwards, met
with Sumitomo Chemical President Hiromasa Yonekura, chair of the
Council on the Promotion of Cooperation for TICAD/Japan-Africa
Exchange Year.

16:14
Met with Special Advisors to Cabinet Nishimura and Kusaka, and
Deputy Assistant Chief Cabinet Secretaries Saka and Ando.

17:01
Attended an executives' meeting in the Diet.

17:22
Met with former Prime Minister Mori at Sogo Nagata-cho Building.

18:15
Met with MOFA Economic Affairs Bureau Director General Otabe at
Kantei. Afterwards, met with Cabinet Intelligence Director Mitani.
Then met with Futahashi.

19:19
Arrived at Kantei residence.

4) G-8 labor ministers agree to make environmental protection and
expansion of employment compatible: Ways to improve labor conditions
for nonpermanent workers to be explored

NIKKEI (Page 5) (Full)
May 13, 2008

A labor ministerial of the Group of Eight (G-8) kicked off in
Niigata City on May 13. The governments of the participating
countries and international agencies agreed to cooperate to maintain
a balance between efforts to protect the environment, including
measures to reduce greenhouse gases, and efforts to expand
employment. The decision will be included in the chairman's summary
to be formally adopted on the 13th and presented at the G-8 (Lake
Toya Summit). Participants also agreed that an increase in the
working poor -- those who work diligently but cannot earn sufficient
income -- has become a serious social problem. Each country will
consider measures in the future.

Many believe that measures to combat greenhouse gases, which impose
such burdens as more capital investment from companies, was a factor
in worsening the employment situation. However, if new businesses
like energy-saving housing, solar energy, or wind-power generation
grow, jobs would be created. Participants agreed to have such a
concept take root as green jobs. The chairman's summary will
stipulate ensuring this policy's consistency with labor and the
global environment by taking relations between the two elements into
consideration.

Some say that 24-hour retail sales, which impose a night shift labor
load on employees and emit an enormous amount of carbon dioxide
(CO2), go against the "green job" concept. Chances are that if moves
to take concrete measures spread, some form of regulation could be
introduced in Japan as well.

In Japan, one employee in three is a low-wage non-permanent
employee, such as a part-timer or a temporary employee. This

TOKYO 00001296 004 OF 010


employment pattern is said to be connected to the working-poor
issue. One reason for the increase in non-permanent employees is
that facing international competition as a result of economic
globalization, companies have lowered personnel expenses.

As such, the chairman's summary mentioned that assistance should be
provided to nonpermanent workers, who are socially vulnerable. This
will likely boost the move in Japan to strengthen regulations on the
dispatch of temp staff.

However, American and British participants insisted that a flexible
labor market is contributing to expanding employment, underscoring a
difference in the stance of Germany and France, which are calling
for strengthened regulations. Which stance Japan will take will
likely come into focus in future discussions on the amendment of the
Worker Dispatch Law.

5) Labor minister expresses concern about employment due to subprime
mortgage crisis, sharp rise in crude oil

YOMIURI (Page 2) (Full)
May 13, 2008

A plenary session of the meeting of labor ministers from the Group
of Eight nations started yesterday in Niigata City. Participants
discussed mainly measures to narrow economic disparities stemming
from globalization. Health, Labor and Welfare Minister Yoichi
Masuzoe expressed concern about the impact of the subprime mortgage
fiasco and the sharp rise in crude oil prices on employment. He
underscored that all countries need to work together since their
labor markets are facing risks.

Representatives of the participating countries shared the perception
that economic globalization brings about certain benefits, but that
it is accelerating disparities among regions and workers. The
meeting also focused on the fact that the working poor, those who
work but still cannot earn their living, has become a social problem
in various countries.

6) Japan will evaluate DPRK's nuclear documents based on their
contents

YOMIURI (Page 4) (Full)
May 13, 2008

North Korea on May 8 presented documents related to its plutonium
program to a senior U.S. government official who was visiting
Pyongyang. Referring to the documents yesterday, the Japanese
government indicated that it would evaluate them based on their
contents. Japanese officials, in cooperation with the United States,
intend to analyze the documents in the weeks ahead to see whether
they will lead to a complete and accurate DPRK declaration of its
nuclear programs. North Korea previously stated it would submit such
a declaration by the end of last year in line with the six-party
agreement.

Vice Foreign Minister Mitoji Yabunaka told a news conference
yesterday: "A sizable number of documents have been submitted. The
U.S. will look closely at them. Japan, while working together
closely with the U.S., will carefully examine the material to see
whether they will serve as a basis for a complete declaration."


TOKYO 00001296 005 OF 010


7) Government to shelve mid-term target for greenhouse gas emissions
cut, to set long-term one, aiming to take initiative

NIKKEI (Page 2) (Full)
May 13, 2008

The government decided yesterday to put on hold its plan of setting
a mid-term target for reducing the nation's greenhouse gas emissions
from 2020 through 2030. Instead, in the Fukuda vision to be
announced in early June prior to the Group of Eight (G-8) Summit
(the Lake Toya Summit) in July, the government will place emphasis
on a long-term target covering the period until 2050 in a bid to
demonstrate leadership by coming up with a large-scale cut. On a
mid-term goal, it has judged it would be difficult to swiftly unify
views because of the need to form a new international framework to
fight global warming following the 2012 expiration of the Kyoto
Protocol.

In the Davos Conference in January, Prime Minister Yasuo Fukuda
proposed setting nation-specific targets. Behind the government's
eagerness to hurriedly come up with a target for cutting domestic
emissions is its aim to set an example as the chair of the Lake Toya
Summit and to take the initiative in forming a post-Kyoto mechanism.
The long-term target is called the "Fukuda vision," so this will be
the government's highest priority challenge that will affect even
the prime minister's standing.

On a mid-term goal, Chief Cabinet Secretary Nobutaka Machimura said
in a press conference yesterday: "Setting a goal within this year is
premature and is impossible." He indicated that the government would
conduct discussion, based on progress in negotiations to be held by
the 15th session of the Conference of the Parties (COP15) to the
United Nations Framework Convention on Climate Change.

The focus of discussion at the COP15 will be a post-Kyoto framework.
This will be closely connected with a mid-term target for slashing
greenhouse gas emissions from 2020 to 2030. Even if the Japanese
government plays up its political presence over a mid-term target at
the Lake Toya Summit, "It may be impossible to involve China and
India in it, something the prime minister views as important,"
according to a senior official of the Cabinet Office. Additionally,
setting a mid-term target might incur negative reactions from
domestic industries.

Under such circumstances, the idea of setting a 60 PERCENT to 80
PERCENT cut in domestic emissions as a long-term goal has emerged
in the government. In the Heiligendamm Summit in Germany last year,
an agreement was reached to look into the idea of halving global
greenhouse gas emissions by 2050, an initiative proposed by former
Prime Minister Shinzo Abe. To achieve this goal, industrialized
countries will have to reduce their respective emissions by more
than 50 PERCENT . But if the Japanese government comes up with the
long-term goal of reducing its emissions by 60 PERCENT to 80
PERCENT , Japan will be favorably compared with the European Union
(EU), which is eagerly tackling the issue.

To make the idea convincing, Japan has to show the means to reach
the goal. In a subcommittee meeting yesterday of the Council on the
Global Warming Issue under the prime minister, an emissions-trading
system, one of the key means to that end, was focused on. From among
expert members from steel and power companies, views calling for
prudence were presented in succession. One member said: "The council

TOKYO 00001296 006 OF 010


should not reach a conclusion on the introduction of the system."

The decision to postpone a mid-term goal and the deadlock in
negotiations on the emissions-trading system result from the Fukuda
cabinet's weakening grip on power. Aides to Fukuda spurred officials
in charge of the global warming issue in the government agencies
concerned to step up efforts to tackle the issue, but a senior
official grumbled: "The prime minister himself will make a final
judgment; otherwise nothing will be decided."

8) Fukuda instructs consumer affairs minister to launch ministerial
negotiations on establishing consumer agency

NIKKEI (Page 2) (Full)
May 13, 2008

Prime Minister Yasuo Fukuda called in Minister in Charge of Consumer
Affairs Fumio Kishida to his official residence yesterday and
instructed him to launch ministerial-level negotiations on
establishing a consumer agency to integrate administrative
functions. The government agencies involved have expressed
opposition to the shift of authority to a new agency. Attention is
being focused on whether the current impasse will be broken by the
prime minister's instruction.

Kishida proposed holding ministerial-level negotiations. In
response, Fukuda encouraged him, saying: "I want you to proceed with
the idea. If some cabinet ministers present views different from
ours, you can tell them that I will meet them."

The Council for Promoting Consumer Policy, chaired by Gakushuin
University Professor Tsuyoshi Sasaki, has decided to produce within
this month a report on how the consumer agency should be, based on
the prime minister's policy. But the Ministry of Economy, Trade and
Industry, the Ministry of Health, Labor and Welfare, the Ministry of
Land, Infrastructure and Transport, and other government agencies in
charge of consumer administration are all cautious about the idea,
focusing on the fact that the shift of the laws under their
jurisdiction to the consumer agency will lead to reducing their
authority. The said council sought their views, but their replies
were almost a unanimous no.

9) Road tax bill to be readopted today by Lower House

ASAHI (Page 1) (Full)
May 13, 2008

In the wake of the House of Councillors' rejection yesterday of a
bill amending the Road Construction Revenues Special Exemption Law
-- legislation aimed at enabling the government to continue
allocating gasoline tax revenues for road construction and other
road-related projects starting in fiscal 2008 -- the ruling parties
will take a two-thirds overriding vote on the bill today in a House
of Representatives plenary session to enact it based on Article 59
of the Constitution. Prior to this, the government will endorse in a
cabinet meeting today a policy of ending from fiscal 2009 a
provision that certain tax revenues be earmarked for road projects.

In yesterday's vote in the Upper House, the legislation was voted
down by 126 votes, with 108 votes supporting it. The bill was then
sent back to the Lower House. The ruling coalition adopted yesterday
a motion calling for taking a revote and presented it to Lower House

TOKYO 00001296 007 OF 010


Speaker Yohei Kono. With the enactment of the bill, the system of
continuing provisional tax rates and of earmarking tax revenues for
road construction and maintenance for another 10 years will be
reset.

Democratic Party of Japan (DPJ) Deputy President Naoto Kan said in a
speech yesterday: "The road issue has revealed the distorted
situation in the central government. We will continue thorough
debate in the Diet on such issues as the new medical system for the
elderly."

Prime Minister Yasuo Fukuda told the press last night at the Prime
Minister's Official Residence (Kantei): "Even if a revote is held on
the bill, it will be valid for only this fiscal year. I have decided
not to use the current law from next fiscal year."

10) Resuming road revenue talks between ruling and opposition blocs
seems difficult

YOMIURI (Page 1) (Excerpts)
May 13, 2008

The opposition-controlled House of Councillors yesterday rejected a
bill requiring gasoline tax revenues to be exclusively used for
highway construction and other road-related projects for another 10
years with a majority vote by the Democratic Party of Japan,
Japanese Communist Party, and Social Democratic Party. As a result,
the legislation was sent back to the House of Representatives. In
the poll, 108 voted for the legislation while 126 against it. The
government and ruling parties plan to adopt at a cabinet meeting
this morning a policy to integrate road-related tax revenues into
the general account starting in fiscal 2009 and then override the
Upper House's decision with a two-thirds majority in the Lower House
in the afternoon. The DPJ is expected to attend the session to vote
against it.

After the legislation cleared the Diet, the ruling camp intends to
ask the opposition parties to resume talks on road-related revenues,
but such seems difficult.

(08051303st) Back to Top

11) PM Fukuda to junior lawmakers: "If we cannot free up
road-related tax revenues for general expenditures, there is no
future for our party"

NIKKEI (Page 2) (Full)
May 13, 2008

Prime Minister Yasuo Fukuda, meeting yesterday with young ruling
coalition lawmakers, including House of Representatives member
Kenichi Mizuno, at the Prime Minister's Official Residence (Kantei),
expressed his strong determination to shift tax revenues earmarked
for road construction and maintenance to the general account
starting in fiscal 2009, saying: "If this cannot be implemented,
there will be no tomorrow for the Liberal Democratic Party and New
Komeito. So, we will do this at any cost."

Some junior lawmakers in the ruling camp had initially indicated
their opposition to a revote on a bill amending the Road

TOKYO 00001296 008 OF 010


Construction Revenues Special Exemption Law aimed at maintaining
road-related taxes for another 10 years on the grounds that it would
contradict Fukuda's policy of freeing up gasoline and other
road-related tax revenues for general expenditures. Since Fukuda has
revealed his intention to have his cabinet endorse the policy, most
of them have now shifted their position to supporting an override
vote. A senior ruling coalition member commented that there would be
"no or few rebels." Fukuda told the press corps yesterday: "There is
no problem in the party."

12) DPJ begins drafting campaign pledges for next Lower House
election

NIKKEI (Page 2) (Slightly abridged)
May 13, 2008

The main opposition Democratic Party of Japan (DPJ) assembled
officials in charge of policymaking from its prefectural chapters in
a Tokyo hotel yesterday and began debate on drafting of a set of
campaign pledges for the next House of Representatives election.
Many representatives from the prefectural chapters called for
improving the party's policy of giving income compensation to
individual farmers. Some said that in order to win the next Lower
House election, which would give the DPJ a chance to take power,
policy measures for urban areas and support for fiscal resources
would be needed. So, placing importance on policy for rural areas
will inevitably be a source of contention.

DPJ President Ichiro Ozawa in a meeting after the debate indicated
again his intention to hurry up preparations for the election,
saying in a strong tone:

"Even if the Lower House is not dissolved during the current Diet
session, there will be no choice but to conduct a general election
before the end of the year -- in the fall or later. I want you to
form a government-led by the DPJ."

The DPJ will set reform of the pension system, including measures to
deal with the pension-record mess, measures to compensate farmers,
and measures for child allowances as its main campaign pledges as it
did so in the last Upper House election. In yesterday's meeting,
referring to the Upper House's measures for supporting agriculture,
one participant said: "I want the party to strengthen measures for
the fisheries industry, as well." Many representatives of the
prefectural chapters said that measures to increase doctors should
be a priority issue.

However, since the percentage of Lower House members coming from
electoral districts in urban areas is higher than that of Upper
House members, Secretary General Yukio Hatoyama expressed concern,
saying: "Policies focusing on urban areas are important."

13) Opposition bloc paying close attention to government's response
to bill aimed at scrapping the medical service system for elderly;
Censure motion against prime minister may be submitted

YOMIURI (Page 4) (Full)
May 13, 2008

The major opposition Democratic Party of Japan's (DPJ) Deputy
President Kan yesterday delivered a speech at a study meeting in
Tokyo for the party's local assembly members. In the speech, Kan

TOKYO 00001296 009 OF 010


referred to the question of a censure motion against Prime Minister
Fukuda and indicated a plan to make a decision on whether to submit
such a motion after watching a response by the government and the
ruling bloc to a bill aimed at scrapping the medical service system
for the elderly, which the DPJ, along with other opposition parties,
is going to introduce in the Upper House. Kan noted: "After the bill
clears the Upper House, we will watch whether the ruling bloc will
vote down or kill the bill in the Lower House and then take issue
with the role of the Fukuda cabinet and the ruling bloc."

After the session, DPJ Policy Research Council Chairman Naoshima
attended a meeting of policy-planning officers from the party's
prefectural chapters and indicated a plan to hurriedly map out a
manifesto for the next Lower House election and sought cooperation
from each prefectural chapter.

14) Where's the LDP's control tower?

SANKEI (Page 5) (Full)
May 13, 2008

The approval rating for Prime Minister Yasuo Fukuda's cabinet has
fallen below 20 PERCENT in some public opinion surveys. Chinese
President Hu Jintao's recent visit to Japan did not help Fukuda
score points from the perspective of the domestic political
situation. Instead, Fukuda's predecessor, Shinzo Abe, made his
presence felt as he touched on the Tibet issue in Hu's breakfast
meeting with former prime ministers.

The fall of the Fukuda cabinet's support rate was reportedly
attributed to the restoration of gasoline surcharges and the
introduction of a new health insurance premium deduction system for
the elderly. In short, however, that is because the Diet is divided,
with the ruling bloc dominating its lower chamber and the opposition
bench controlling its upper house. This has caused national politics
to malfunction. This explains everything.

The Constitution sets the House of Representatives above the House
of Councillors. The ruling Liberal Democratic Party's leadership was
therefore strong enough to force things through the Diet. The House
of Representatives is constitutionally allowed to take a second vote
on legislative measures for their passage with a concurring vote of
two-thirds or more of its members present if the House of
Councillors does not vote on them within 60 days after they are sent
from the House of Representatives. If the LDP and its coalition
partner, New Komeito, had passed budget-related bills, including the
gasoline surcharge bill, by the end of January, all the bills could
have cleared the Diet before the end of the fiscal year in March.

In that case, the leading opposition Democratic Party of Japan
(Minshuto) would have put up do-or-die resistance by boycotting all
parliamentary deliberations. However, such a boycott strategy would
not have been well-received by the public. The Diet might have been
back to normal in a half month.

On Apr. 27, there was a by-election in Yamaguchi Prefecture's
District 2 for a seat in the House of Representatives. In that
election, the LDP candidate was swamped by the DPJ candidate. This
was also because of an error in the LDP's leadership. The election
was held with Yoshihiko Fukuda running for Iwakuni City's mayoral
election in February. Fukuda is the successor to Shinji Sato and one
of the 83 "Koizumi children" who ran in the 2005 general election

TOKYO 00001296 010 OF 010


for the House of Representatives on the privatization of state-run
postal services.

The DPJ's Hideo Hiraoka, who won the by-election this time, defeated
Sato in the 2000 House of Representatives election and won the
following election. The LDP must have known that Hiraoka was a tough
rival.

The question is whether half of the "Koizumi children" will survive
the next election for the House of Representatives. In the 2005
general election over postal privatization, Fukuda defeated Hiraoka
by a narrow margin of 588 votes. At the time, Hiraoka was elected in
his proportional representation bloc. Fukuda's defeat in the next
election was taken for granted.

Fukuda figured it out, and he ran in the Iwakuni mayoral race. If
the LDP's leadership had offered a higher standing for Fukuda on its
proportional representation list in the next House of
Representatives election, the LDP would not have had to go through
the by-election.

This is the first time for Japan to experience a divided Diet in the
postwar era. As it stands, the LDP must be scrupulous and dynamic
enough to break down its old paradigms, or it cannot respond. The
grand coalition initiative was part of it. However, it fell
through.

The LDP also has no effective control tower or staff office to
script a scenario for the political situation as a whole. The
governing party's crisis goes beyond the outcome of a by-election.

15) DPJ Secretary General Hatoyama looks forward to joining hands
with Hiranuma

YOMIURI (Page 4) (Full)
May 13, 2008

The major opposition Democratic Party of Japan's (DPJ) Secretary
General Hatoyama yesterday spoke of former Minister of Economy,
Trade and Industry Takeo Hiranuma's remarks, in which he said he may
organize a new party before the next Lower House election. Hatoyama
expressed hope of teaming up with Hiranuma, telling reporters, "I
hope to see both of us work together with the aim of bringing about
a dramatic change to Japanese politics."

DONOVAN

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