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Cablegate: Japanese Morning Press Highlights 05/16/08

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UNCLAS SECTION 01 OF 14 TOKYO 001342

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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 05/16/08

Index:

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

China quake:
4) Japan sends rescue team to earthquake-stricken Sichuan, China
(Tokyo Shimbun)
5) Beijing changes stance to allow Japanese rescue term into quake
are, recognizing their expertise and giving priority to improved
bilateral ties (Yomiuri)
6) Chinese President Hu Jintao's desire to maintain good ties with
Japan explains turnaround in policy toward accepting human
assistance in quake zone (Asahi)

7) Prime Minister Fukuda to announce doubling of aid to Africa over
five years (Yomiuri)

8) Government to help private companies invest in Iraq (Nikkei)

Defense and security affairs:
9) Fourteen governors of prefectures hosting U.S. bases meet chief
cabinet secretary to call for revision of the status of forces
agreement (Mainichi)
10) Government, Okinawa prefecture frustrated at lack of progress on
Futenma relocation, fear result of upcoming assembly election could
be further setback (Yomiuri)

11) U.S., Japanese governments agree that USFJ will inform Japanese
authorities within a day or two of American serviceman deserting
post (Asahi)
12) Defense Ministry decides to provide USFJ-realignment-related
subsidies to local governments (Yomiuri)

13) Japan to export 50,000 tons of rice to the Philippines (Nikkei)


14) Whale meat taken by research whaler crewman was a "gift" not
stolen says company (Asahi)

Political agenda:
15) Speculation that the long-awaited Fukuda cabinet shuffle will
come after the G-8 Summit (Tokyo Shimbun)
16) DPJ head Ozawa off on a nationwide stumping tour to ready for
the next election (Asahi)
17) Improving the controversial system of medical care for the
elderly over 74 would cost 200 billion yen in revenue resources
(Nikkei)
18) Creation of consumer affairs agency involves transfer of
jurisdiction of 22 laws (Nikkei)

19) Joint government-private sector development of GX rocket has
skyrocketed to 200 billion yen (Mainichi)

Articles:

1) TOP HEADLINES

Asahi, Mainichi, Yomiuri, Sankei, Tokyo Shimbun, and Akahata
Quake toll could top 50,000; Japan's rescue team dispatched to
China; 10 million affected

TOKYO 00001342 002 OF 014

Nikkei:
Japan sees first decline in number of vehicle owners; Related
industries to receive blow

2) EDITORIALS

Asahi:
(1) Rational review of health insurance system for elderly needed
(2) Hammer out measures to deal with steep oil price rise at G-8
Summit

Mainichi:
(1) Launch of group to consider adding life sentence to criminal
law: Propriety of death sentence also should be discussed
(2) Thoroughly discuss plan for independent permanent-settlement
area in line with "post-mega merger of Heisei era" system

Yomiuri:
(1) Strict antimonopoly bill in line with international trend
(2) 60th anniversary of establishment of Israel: Status quo will
bring no bright future

Nikkei:
(1) Change river policy prioritizing construction of dams
(2) Many things must be considered before way opened to using space


Sankei:
(1) Simulation of major quakes in Kinki, Chubu: Prepare full
measures, focusing on key traffic systems
(2) Companies' account settlement at turning point: Now recheck
business strategy

Tokyo Shimbun:
(1) Work out steady measures in anticipation of major quake
(2) "Peaceful use" starting point of use of space

Akahata:
(1) Reckless acts against public views steeply lowering support for
Fukuda cabinet

3) Prime Minister's Official Residence (Kantei)

Prime Minister's schedule, May 15

NIKKEI (Page 2) (Full)
May 16, 2008

09:26
Met with former LDP Secretary General Nakagawa at Kantei.
Afterwards, met with LDP Reform Implementation Headquarters Chief
Takebe.

10:10
Had a telephone conference with Australian Prime Minister Rudd,
joined by MOFA Asian and Oceanian Affairs Bureau Director-General
Saiki. Afterwards, met with Special Advisor to Prime Minister Ito.

11:33
Met with Deputy Chairman Hironaka and Secretary-General Nohno of the
Parliamentary Forum to Discuss International Population Issue.

TOKYO 00001342 003 OF 014

13:05
Met with National Police Agency Director-General Yoshimura, followed
by Special Advisor to Cabinet Nishimura.

13:58
Met with LDP Diet Affairs Committee Chairman Oshima and New Komeito
Diet Affairs Committee Chairman Urushibara.

14:38
Met with Chief Cabinet Secretary Machimura. After him, met with MOD
Defense Intelligence Headquarters Director-General Hokazono, Defense
Policy Bureau Director-General Takamizawa, and Cabinet Intelligence
Director Mitani. Mitani remained.

15:11
Met with Deputy Agriculture Minister Murakami and MOFA Economic
Affairs Bureau Director-General Otabe. Afterwards, Met with FAO
Director-General Diouf, joined by former Agriculture Minister
Yatsu.

16:00
Met with Nikkei Chairman Sugita, its President Kita, and its
Managing Director Akiyama. Afterwards, met with National Association
of Shinkin Banks Chairman Takaharu Omae. Afterwards, met with Vice
Foreign Minister Yabunaka, joined by Saiki.

17:38
Met with METI Vice Minister Kitabatake, Small and Medium Enterprises
Agency Director-General Fukunaga and MAFF Director-General for
Agricultural Affairs Ito.

18:00
Met with Special Advisor to Cabinet Okuda.

18:58
Attended a study meeting on foreign policy at Kantei, joined by
Machimura.

4) Japan sends rescue team to China

TOKYO SHIMBUN (Page 1) (Full)
May 16, 2008

Following the Chinese government's announcement yesterday of
accepting a Japanese rescue team, the Japanese government decided to
dispatch an international disaster relief team that will consist of
personnel from the Fire and Disaster Management Agency, the National
Police Agency, the Japan Coast Guard, and the Japan International
Cooperation Agency. The first unit of some 30 personnel left Haneda
Airport yesterday evening for China. It will arrive at Chengdu, the
capital of Sichuan Province before dawn today. Later in the morning,
the group will travel to Qingchuan County, an area most hit hard by
the earthquake, some 80 kilometers northeast of Sichuan Province's
Beichuan County, and begin rescuing victims. The second relief unit
of some 30 personnel will depart for China today. The Japanese team
will be then composed of a total of 60 or so personnel.

According to the Ministry of Foreign Affairs, the Japanese rescue
team is the first foreign rescue team China has accepted.

The Japanese team consists of 17 disaster and fire management

TOKYO 00001342 004 OF 014


officials including those from the Tokyo Fire Department's
Interprefectural Emergency Rescue Unit, and 20 riot police officers
including those from the Tokyo Metropolitan Department, 13 special
rescue officials from the Japan Coast Guard, and physicians and
nurses from the Japan International Cooperation Agency. Three search
and rescue dogs also join the team.

The Ministry of Internal Affairs and Communications' Fire and
Management Agency intended to send 17 fire fighters to the quake-hit
area, but because the Chinese side did not asked for the dispatch,
the agency at one point decided not to dispatch them.

5) In about-face from just days before, China accepts Japan's offer
to send rescue team; China may have high opinion of Japan's
experience in relief efforts

YOMIURI (Page 2) (Excerpts)
May 16, 2008

The Japanese government will send in stages an international
disaster relief team, consisting altogether of some 80 personnel, to
Sichuan Province in order to rescue victims of the deadly
earthquake. The first group of 31 personnel departed for China
yesterday. Today, the second group of 29 personnel will leave Japan.
Following them, a medical team of some 20 personnel is planned to be
sent to China.

Immediately after the occurrence of the quake, Tokyo made an offer
to send a rescue team to China, but Beijing did not respond.

Yesterday, however, China made an about-face from its previous
stance (and accepted Japan's offer to send a rescue team). Speaking
about why China has now asked Japan to send a rescue team, Senior
Vice Foreign Minister Itsunori Onodera noted: "Japan has experience
in dealing with disasters. The recent improvement in Japan-China
relations also may have had a good effect." Prime Minister Fukuda
told reporters at the Prime Minister's Official Residence: "It's
take time to assess the full scope of the damage caused by the
quake. It's unavoidable for it to (be slow to ask for help). Japan
will extend as much cooperation as possible."

Japan has sent a small rescue team to China to deal with the
aftermath of a massive flood in 1989 and to deal with the damage
caused by SARS in 2003, but the rescue team Japan has sent this time
is the largest ever.

The rescue team this time is composed of personnel from the Ministry
of Foreign Affairs, the National Police Agency, the Japan Coast
Guard, and the Japan International Cooperation Agency. It does not
include any personnel from the Ministry of Defense and the
Self-Defense Forces. According to a government official, the Chinese
side did not want Japan to send SDF personnel to China. The
disaster-affected area is close to Chongqing City, where
anti-Japanese sentiments are still deep-rooted. Apparently, there
seemed to be the Chinese side's judgment that the arrival of
Japanese military personnel (even though their aim is to rescue
victims) could further irritate frustrated local residents and have
the opposite effect.

Is this China's signal to attach important to Japan?

Yusuke Sugiyama, Beijing

TOKYO 00001342 005 OF 014

The Chinese government yesterday decided to accept Japan's offer to
send its rescue team to the area hit by the deadly Sichuan
earthquake. Behind this decision is Beijing's judgment that it would
be necessary to demonstrate at home and abroad that it is doing all
it can to rescue human lives despite the situation being at its
worst and the number of victims increasing.

After Beijing announced its decision to accept a Japanese rescue
team, a major Chinese message board on the Internet posted a number
of messages that unusually expressed thanks to and hopes of Japan
and also anxiety like "Need to come here quickly:. 72 hours have
already passed.'"

The entire country is anxious about the slow progress in rescuing
tens of thousands of buried victims of the quake. Messages critical
of the government are drawing attention. One such message said, "Too
late." The public has cast doubts on the government's refusal to
accept foreign rescuers by claiming "destroyed roads," according to
the Civil Affairs Ministry. This seems to strong pressure on the
government to comply.

6) China desperate to save quake victims, accepts Japan's disaster
relief team; Destroyed roads stand in way of relief efforts

ASAHI (Page 2) (Excerpts)
May 16, 2008

The first Japanese disaster relief team departed for China late
yesterday, following the Chinese government's acceptance of such
assistance. Behind Beijing's acceptance lies the slow progress in
rescuing victims of the recent quake. The Japanese assistance unit
left for China but it was after the 72-hour time limit had passed -
meaning that the survival rate then sharply drops in the aftermath
of an earthquake. Still, victims are waiting for rescue.

Hu administration shows consideration to relations with Japan

Hideto Fujiwara, Beijing

"We have taken into account the principle that Japan is close to us
and is quick to act." This remark came out from Chinese Foreign
Ministry Spokesman Qin Gang yesterday, when he explained why China
had accepted Japan's international disaster relief team.


On the night of May 12, the Chinese Civil Affairs Ministry and
Foreign Ministry accepted the Japanese government's offer to send an
emergency relief team. An official of the Civil Affairs Ministry,
which received the offer from Japan ahead of the Foreign Ministry,
told the Japanese side, "We will consider it." The ministry official
was unable to respond promptly to the offer before his country had
yet to prepare any relief unit.

Meanwhile, the Chinese Foreign Ministry seized this offer as an
opportunity for China to demonstrate international cooperation,
especially with the Beijing Olympics nearing. In addition, the
ministry was apparently motivated by the desire to promote ties with
Japan, which President Hu Jintao had visited recently. According to
a diplomatic source, Japan's offer was without delay relayed to Hu
and other Chinese leaders.


TOKYO 00001342 006 OF 014


China's National Earthquake Relief Team consisting of 214 personnel
flew from Beijing at 7:45 p.m. of May 12, some five hours after the
occurrence of the earthquake. Some of the team had experience in
relief activities in Indonesia and Iran. Joining the team were 12
search-and-rescue dogs, and the team has two quake-relief-purpose
vehicles and one emergency control vehicle. The team arrived at the
disaster site in Dujiangyan City, Sichuan Province, at 2:23 a.m. of
May 13.

China is frequently hit by earthquakes. So, it established the
National Earthquake Relief Team in 2001 as a professional group of
rescuers. Afterwards, local relief teams were also established, but
the number of rescuers joining those teams total only some 3,000
persons from across the country.

On May 13, a senior Civil Affairs Ministry official told a news
conference: "Rescuers could not reach the disaster site because of
bad road conditions." Two days later, China turned around its
previous policy (of not accepting foreign rescuers) and accepted
(Japan's offer to send a rescue unit). According to a diplomatic
source, the damage caused by the deadly earthquake is so serious
that China had no choice but to accept the offer. Reportedly, the
decision to accept the offer was made by Hu himself.

Yesterday, Prime Minister Fukuda indicated his understanding toward
the situation in China, noting, "Given the scale of the recent
earthquake, it is only natural to take time to see the full scope of
the damage. Some time would be necessary to do so. It would be
unavoidable to take time to ask for rescue teams from other
countries."

The survival rate drops significantly 72 hours after the occurrence
of an earthquake. Already 72 hours have passed in China, but the
Chinese side strongly hoped for a dispatch of a rescue team. This
move could be taken as a message by the Chinese leadership that the
Chinese government has not given up all hope of rescuing victims.

7) Fukuda to announce in African Development Conference a plan to
double ODA to Africa over five years

YOMIURI (Page 2) (Full)
May 16, 2008

The government decided yesterday to augment official development
assistance (ODA) disbursements to Africa. Final coordination is now
underway on a plan to double ODA to Africa over the next five years.
Prime Minister Fukuda will announce the plan in the 4th Tokyo
International Conference on African Development (TICAD4) to open on
May 28 in Yokohama. The government intends to boost aid particularly
to countries in sub-Sahara Africa, an area suffering from serious
poverty and internal conflicts. The government aims to assist
African countries' agricultural development and economic growth with
increased aid.

The Japanese government announced in 2005 that it would double ODA
disbursements to Africa in three years. Since then, it has augmented
the amount of aid. A senior Foreign Ministry official said: "It will
be possible to attain this goal," but a greater part of the
financial aid has been used for their debt relief. Given this,
Africa has asked the government to increase more substantial
assistance. Recently, concern about steep rises in food prices is
also heightening there.

TOKYO 00001342 007 OF 014

Japan has judged it is necessary to amplify its aid to Africa as the
chair of the TICAD4 and the upcoming Lake Toya Summit (the Group of
Eight Summit).

The government intends to offer more grant and payable aid to
finance infrastructure-construction projects to develop technology
to increase food production and to improve agricultural output.

8) Government, private sector to propose establishing safe zones as
support measures for companies advancing into Iraq

NIKKEI (Page 5) (Full)
May 16, 2008

The government will consider support measures for companies
advancing into Iraq. The government specifically plans to establish
a public-private economic committee to periodically exchange
investment information as well as safe zones where companies can
conduct activities freely. An Iraq trade policy study group will be
established in the Ministry of Economy, Trade and Industry. The
group will be tasked with presenting a set of proposals to the
Japanese and Iraqi governments by late July.

Although the situation in Iraq is still unstable, Western oil majors
have advanced into the country for interests. The government will
improve the business environment surrounding Japanese companies.

The study group will hold its inaugural meeting on May 16. The
meeting will be attended by officials from the Foreign Ministry,
Japan External Trade Organization (JETRO), private-sector
representatives, and Iraqi Ambassador to Japan Al-Jumaily. The group
will propose the establishment of a public-private economic
committee and sending a Japanese corporate delegation to the Kurdish
Autonomous Region, where security is relatively stable. It will also
call for the establishment of safe zones near borders and airports
for corporations.

9) SOFA revision called for

MAINICHI (Page 5) (Full)
May 16, 2008

Kanagawa Gov. Shigefumi Matsuzawa and Okinawa Gov. Hirokazu Nakaima,
who are chairman and vice chairman of the association of 14
prefectures hosting U.S. bases, visited yesterday Chief Cabinet
Secretary Nobutaka Machimura at the Prime Minister's Official
Residence, to call on the government to revise the Japan-U.S. Status
Forces Agreement (SOFA) and the establishment of a special committee
of representatives from the municipalities in the Joint Japan-U.S.
Committee.

10) Gov't, Okinawa fret over Futenma relocation ahead of local
election

YOMIURI (Page 4) (Full)
May 16, 2008

The government and Okinawa Prefecture are now growing frustrated as
they see little progress in the planned relocation of the U.S.
Marine Corps' Futenma Air Station in Ginowan, Okinawa Prefecture.
Okinawa Prefecture will announce an election on May 30 for its

TOKYO 00001342 008 OF 014


assembly with voting and vote counting slated for June 8. This is
because the relocation plan could be affected if the ruling parties
fail to retain a majority in the prefectural assembly, according to
a government official.

Okinawa Gov. Hirokazu Nakaima yesterday met with Chief Cabinet
Secretary Machimura at the prime minister's office as one of those
representing an association of governors from prefectures hosting
U.S. military bases. In the meeting, Nakaima asked the government to
revise the Japan-U.S. Status of Forces Agreement.

Nakaima looked for a chance to meet Machimura before or after the
meeting. That is because Nakaima wanted to propose revising the
government's plan to relocate Futenma airfield to a coastal area of
Camp Schwab in Okinawa Prefecture's northern coastal city of Nago.
However, he could not take Machimura's time. With the prefectural
assembly election scheduled ahead, Okinawa Prefecture has a sense of
crisis over the pending issue of Futenma relocation.

The government plans to lay down a V-shaped pair of airstrips as an
alternative facility for Futenma airfield. Meanwhile, Okinawa
Prefecture has asked the government to move the planned facility's
location into the sea. The government will respond to Okinawa's
proposal to revise the relocation plan. However, there was a strong
backlash from the Unites States. The government therefore remains
unable to go ahead with full-fledged consultations with Okinawa
Prefecture.

The Okinawa prefectural assembly currently has a total of 48 seats,
broken down into 27 for the ruling parties and 20 for the opposition
parties with one vacancy. This time, however, a number of
heavyweights from the ruling parties have clarified their intent to
run in the next election for the House of Representatives or retire.
In Okinawa Prefecture, some municipalities have been consolidated
into larger ones. There are also changes in the number of seats for
each electoral district. Some presume that the ruling and opposition
parties could be on an even balance. The governor's approval is
needed for filling up the alternative facility's neighboring waters.
However, if the ruling parties should become a minority group in the
prefectural assembly, the governor's judgment may also be bound up
with the prefectural assembly's decision.

"If the ruling and opposition parties change places, that would
affect the relocation," a high-ranking government official said
yesterday evening. "We must win," New Komeito Secretary General
Kitagawa stressed in a liaison meeting of the government and ruling
coalition yesterday.

"The prefectural assembly election would have repercussions from
national politics, such as the new health insurance system for the
elderly," Nakaima told reporters after meeting with Machimura. "I
want to ask the expected candidates to do their best," he added.

11) U.S. soldiers to be determined as deserters within a day or two

ASAHI (Page 34) (Full)
May 16, 2008

Japan and the United States yesterday held a meeting of their
intergovernmental joint committee to discuss the lack of information
about a U.S. military deserter in connection with a taxicab driver
slain in the city of Yokosuka, Kanagawa Prefecture. In the meeting,

TOKYO 00001342 009 OF 014


the Japanese and U.S. governments agreed to quicken procedures to
acknowledge desertion. Based on the agreement, the United States
will immediately inform Japan about deserters and ask Japanese
police authorities to arrest them. The Japanese and U.S. governments
will improve the Japan-U.S. Status of Forces Agreement's
implementation.

Senior Vice Foreign Minister Itsunori Onodera revealed the agreement
in a press conference yesterday. The U.S. military used to take up
to about 30 days to acknowledge a deserter. From now on, the U.S.
military is expected to acknowledge a deserter within a day or two
after that deserter's whereabouts became unknown.

12) USFJ realignment subsidies set for local hosts

YOMIURI (Page 4) (Full)
May 16, 2008

The Defense Ministry yesterday decided informally on the amount of
subsidies to be granted in fiscal 2008 to municipalities for their
increased burden along with the planned realignment of U.S. forces
in Japan. The ministry will grant a total of 6.168 billion yen to 38
municipalities, excluding Kanagawa Prefecture's Zama City, which is
opposed to the U.S. Army's plan to move the forward-deployed
headquarters of its 1st Corps headquarters to Camp Zama.

Okinawa Prefecture's Nago City and Ginozason Village, where the U.S.
Marine Corps' Futenma Air Station will be relocated, will be
subsidized for the first time. Nago City will receive the largest
amount of subsidies at 970 million yen, which includes a subsidy for
fiscal 2007. Yamaguchi Prefecture's Iwakuni City, which has now
accepted the planned transfer of carrier-borne aircraft, will
receive the second largest amount of subsidies at 768 million yen.

13) Japan mulling exporting 50,000 tons of rice to Philippines,
using stocks held by Rice Stable Supply Ensuring Support
Organization: Largest amount on commercial basis

NIKKEI (Page 5) (Full)
May 16, 2008

A plan to export rice to the Philippines, where there is a growing
concern about a rice shortage due to a sharp rise in international
rice prices, has surfaced. The most likely plan is to export 50,000
tons of rice from stocks, which the Rice Stable Supply Ensuring
Support Organization (RSSESO) purchased in 2005, a year that
experienced abundant crops. Japan exports about 1,000 tons of rice
on a commercial basis. If the plan is realized, the scale would be
the largest amount ever.

The Philippines is a major rice-importing country in the world. It
is having difficulty procuring rice due to a rise in the prices of
Thai rice, an indicator for rice prices. It has already exchanged a
memorandum on rice imports with Vietnam. It appears that it has also
sought cooperation from Japan.

The 2005 crop of rice that the RSSESO purchased cannot be sold
because of the supply and demand adjustment by the government. It is
selling the stocks at low prices for use for rice powder. The
organization had approximately 68,000 tons of such rice in stock as
of the end of March. It will likely undergo coordination with the
possibility of exporting 50,000 tons from those stocks.

TOKYO 00001342 010 OF 014

The largest importer of Japanese rice on a commercial basis is
Taiwan. Japan exported 450 tons to that nation last year. A ban on
rice exports to China was lifted last year on a provisional basis.
However, export amounts to it are no more than 120 tons a year.

If it becomes possible to export rice on a scale much larger than
the current level, it would boost a drive to expand rice exports,
which have been sluggish due to high production cost. However, since
the RSSESO has purchased the rice for a special reason --
supply-demand adjustment due to abundant harvest, whether the move
will lead to expanded exports is unclear.

14) Reversing previous explanation, operating whaling company says
10 kilograms of whale meat was given to crewmembers as "souvenir"

ASAHI (Page 34) (Abridged slightly)
May 16, 2008

Crew members of a Japanese whale research ship are suspected to have
taken without permission some meat from whales caught during their
activities. In this connection, Kyodo Senpaku Kaisha Ltd., the
company that operates the whale research vessels, revealed yesterday
the existence of the custom of giving 10 kilograms of whale meat to
each crewmember free of charge as a "souvenir," reversing its
previous claim until May 14 that denied charges of embezzlement or
giving "souvenirs." There is clearly a gap in explanations with the
Institute of Cetacean Research (ICR), which is authorized to conduct
research whaling.

According to Kyodo Senpaku, the souvenir consisted of 8 kilograms of
whale meat known as unesu in Japan that is used for bacon and 2
kilograms of red meat. Multiplying that amount by some 250 crew
members comes to 2.5 tons in total. A source said: "Each crewmember
can buy up to 3 kilograms of meat. They can also buy meat that was
not bought by others." Kyodo Senpaku director Tajiro Tsurumoto
noted: "Giving souvenirs is a custom in conducting research whaling.
The money for the souvenirs has been paid to the ICR, so there is no
problem. We think the amount of meat was also appropriate."

Souvenirs are usually given to crewmembers before getting off the
ship. Whale meat is put on the market after the Fisheries Agency
determines sales prices about two months after research vessels
return to Japan. (Souvenir meat) hits the market before that. The
ICR has not said that it had sold "souvenir meat" to Kyodo Senpaku;
it has simply said that the organization had handed several
kilograms of meat to each crewmember.

Administrative Vice-Agriculture, Forestry and Fisheries Minister
Toshiro Shirasu in a press conference yesterday endorsed the
practice of giving "souvenirs," saying, "Giving 10 kilograms of meat
(per person) is not really a problem." At the same time, he
indicated that Japan would conduct thorough research.

15) LDP lawmakers waiting for cabinet posts ardently desire cabinet
shuffle after G8 summit

TOKYO SHIMBUN (Page 2) (Full)
May 16, 2008

Calls are growing in the ruling Liberal Democratic Party (LDP) for a
cabinet shuffle after the Group of Eight summit in early July in

TOKYO 00001342 011 OF 014


Hokkaido. All the more because a cabinet shuffle has been put off,
although there have been many chances to carry it out, LDP members
who have been looking forward to becoming cabinet ministers,are
expressing their expectations of a cabinet shuffle after the G8
summit.

On the night of April 27 when the LDP candidate was defeated in the
Lower House by-election for the Yamaguchi No. 2 constituency, Prime
Minister Yasuo Fukuda met at his official residence with two
influential LDP members, former Prime Minister Yoshiro Mori and
Mikio Aoki, former chairman of the LDP Upper House caucus. Fukuda
there told Mori and Aoki: "I will neither dissolve the Lower House
nor resign en masse with my cabinet."

Feeling secure after hearing Fukuda's remark, Mori and Aoki
suggested to Fukuda that in order to boost the government the
cabinet be shuffled: 1) sometime between the end of the ongoing
regular Diet session and the opening of the G8 summit, 2)
immediately after the G8 summit , or 3) around September. The three
discussed the pluses and minuses of the three timings.

Since Fukuda retained most ministers appointed by former Prime
Minister Shinzo Abe in his cabinet when he took office, calls are
strong in the LDP for a cabinet shuffle.

Fukuda forwent shuffling his cabinet in mid-January before the
convocation of the current Diet session, claiming a tight Diet
schedule. Although there were views calling for a cabinet shuffle at
the end of March after the Diet passed the budget for fiscal 2008
and in May soon after the Golden Week holidays, Fukuda still did not
make a move to shuffle his cabinet.

After the end of the ongoing regular session, the excuse that
cabinet ministers cannot be changed while the Diet is in session
cannot be used. If the cabinet is shuffled before the G8 summit,
chances are that a minor cabinet shuffle will be carried out because
the foreign minister and some other ministers will be retained in
their posts. Therefore, many LDP lawmakers are greatly looking
forward to a large-scale shuffle after the G8 summit.

There is a cautious view about a cabinet shuffle that Fukuda's grip
on the party will weaken because some lawmakers and factions whose
expectations are betrayed will hold a grudge against him and because
there is concern about possible scandals involving new cabinet
ministers. However, the dominant view in the party is that in a bid
to gain public support rating for his cabinet, Fukuda has no other
choice but to carry out a drastic shuffle even if it involves some
risk.

However, LDP views are divided as to when the cabinet should be
shuffled -- immediately after the G8 summit or in September. Except
the presidency, the terms of the LDP executives will expire at the
end of September. Many LDP members has said that in order to avoid
double work, a cabinet shuffle and the selection of the party
executives should be conducted the same time. LDP members will have
to wait for Fukuda's decision on whether a cabinet shuffle and the
selection of the party executives will be carried out in July or in
September.

16) LDP President Ozawa to accelerate nationwide stumping tour for
next Lower House election


TOKYO 00001342 012 OF 014


ASAHI (Page 4) (Full)
May 16, 2008

Democratic Party of Japan (DPJ) President Ichiro Ozawa from late May
will accelerate his nationwide stumping tour to campaign for the
next House of Representatives election. The purpose of his decision
is to have his party speed up the selection of candidates by
creating a surge in public expectations about an early dissolution
of the Lower House and a snap election.

Ozawa, who started stumping nationwide last fall, has so far visited
16 prefectures this year. He plans to place priority on campaigning
in the Tohoku and Kyushu-Okinawa regions.

The reason is that he considers that obtaining a majority of seats
of the single-seat constituencies in the Tohoku region is the first
step for his party's goal of securing 150 seats in the single-seat
constituencies nationwide and that he thinks since the DPJ forces
have not yet taken root in the Kyushu region, an early promotion in
the region is needed. He will visit either region in later this
month and plans to speed up the pace of stumping nationwide.

He intends to inspect medical, welfare and agricultural facilities
in places where he will visit and to hold press conferences together
with LDP-sponsored candidates. He also plans to hold meetings with
senior members of Rengo (Japan Trade Union Confederation), DPJ
prefectural chapters and support groups to obtain their cooperation
in the next Lower House election.

17) Ruling parties' proposals to improve new medical service system
for elderly people requires fiscal resources worth 200 billion yen,
going against government goal of constraining social security
expenses

NIKKEI (Page 2) (Full)
May 16, 2008

The government and the ruling parties have come up with measures to
improve a new medical service system for elderly people aged 75 and
older, which was introduced in April. However, the package would
require about 200 billion yen if all proposals are to be
implemented. Since the government has already set a goal of
constraining growth of social security expenses by 220 billion yen a
year, coordination would likely encounter difficulties.

Yuya Niwa and Hidehisa Otsuji of the Liberal Democratic Party (LDP)
and Chikara Sakaguchi of the New Komeito yesterday evening conferred
on measures to remedy the system. One participant revealed, "Many
participants called for cutting premiums paid by low-income earners
by 80 PERCENT -90 PERCENT ."

Premiums paid by low-income earners are reduced by 20 PERCENT -70
PERCENT under the present system. The ruling parties' proposal
targets husbands whose income is lower than 1.68 million yen a year
(current reduction percentage is 70 PERCENT ). The plan likely to be
adopted is that if a husband's income is lower than the basic
pension -- 66,000 yen a month or approximately 800,000 yen a year,
premiums paid by the husband and his wife would be reduced by 80
PERCENT -90 PERCENT .

Another plan is the exemption of premiums paid by elderly persons
supported by their company employee child for a year starting in

TOKYO 00001342 013 OF 014


October. The government and the ruling parties will also look into
freezing a decision to raise over-the-counter hospital fees paid by
elderly persons in the 70-74 age bracket starting next April.

The problem is fiscal resources. It would need about 30 billion yen
to exempt elderly persons supported by their company-employee child
from paying premiums and about 140 billion yen to freeze a hike in
the over-the-counter hospital fees paid by elderly people aged
between 70 and 74.

If those measures are implemented within the current fiscal, it
would be possible to use a supplementary budget. However, if they
are carried out next year, a budgetary ceiling would be set on
expenditures.

Given the fact that the government intends to constrain growth of
social security expenses by 220 billion yen a year, it is difficult
for it to make a generous commitment.

18) Government plans to concentrate personnel, authorities in
envisaged consumer agency: Jurisdiction of 22 laws to be transferred
to enable agency to give recommendation to cabinet ministers;
Government agencies alarmed about move

NIKKEI (Page 2) (Excerpts)
May 16, 2008

A draft proposal for a consumer affairs agency that the government
will establish in fiscal 2009 was revealed on May 15. According to
the plan, the envisaged agency will be made an external organ of the
Cabinet Office. It will be granted authority to carry out
comprehensive coordination with and issue recommendations to other
government agencies. It will have a committee as a subordinate
organization, based on Article 8 of the National Government
Organization Law, for the purpose of reflecting consumers' opinions
in its policy and administrative procedures. The government
envisages bringing under the agency's jurisdiction a total of 22
laws, such as the Product Liability Law, the Law for Preventing
Unjustifiable Extra or Unexpected Benefit and Misleading
Representation and the Financial Instruments Sales Law. However,
existing agencies are alarmed about their being deprived of
authority and their personnel being trimmed. The government will aim
at reaching a settlement in ministerial-level negotiations to be
held around May 19.

The establishment of a consumer affairs agency is based on the
proposal made by Prime Minister Yasuo Fukuda. The Consumer
Administration Promotion Council reporting to the prime minister,
chaired by Gakushuin University Professor Takeshi Sasaki, will map
out a set of specific proposals in early June. The government will
aim at submitting related bills, such as one amending the Cabinet
Office Law, to the extraordinary Diet session to be convened in the
fall.

19) Developing GX rocket costs 200 billion yen, three times initial
estimate

MAINICHI (Page 2) (Full)
May 16, 2008

The government and private sectors are jointly developing the GX
mid-sized rocket. Japan Aerospace Exploration Agency (JAXA) and

TOKYO 00001342 014 OF 014


other organizations yesterday reported to a Space Activities
Commission sub-panel that test-launching a prototype GX would cost
between 15 billion yen and 19.5 billion yen. The cost is higher than
that for the mainstay H2A rocket with launch capability more than
twice the GX's. Many questioned the significance of developing the
GX.

In the meeting, JAXA and the private sector presented the estimates
based on four patters of components and launch sites.

The project would further cost between 83 billion yen and 138
billion yen. The total development cost would swell to 150 billion
yen to 200 billion yen instead of the originally projected 55
billion yen.

DONOVAN

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