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Cablegate: Japanese Morning Press Highlights 06/04/08

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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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DASD/ISA/EAPR/JAPAN; DEPT PASS ELECTRONICALLY TO USDA
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E.O. 12958: N/A
TAGS: OIIP KMDR KPAO PGOV PINR ECON ELAB JA

SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 06/04/08


Index:

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

4) Ambassador Schieffer meets with independent lawmaker Hiranuma on
the North Korea abduction issue (Mainichi)

Fukuda diplomacy in Europe:
5) Prime Minister Fukuda at the FAO food summit announces the
release of 300,000 tons of imported rice and a $50 million donation
to help fight food crisis (Tokyo Shimbun)
6) Outline of Prime Minister Fukuda's speech at the food security
summit in Rome (Nikkei)
7) Fukuda to take back many difficult issues for G-8 Summit (Nikkei)

8) Fukuda in Rome meeting with Iranian President Ahmadinejad presses
for end to uranium-enrichment program (Nikkei)
9) Fukuda, French President Sarkozy discuss G-8 Summit issues
(Nikkei)

10) Ambassador to London Nogami retires to become adviser to Mizuho
Group (Nikkei)

Defense and security affairs:
11) Government engaged in full-scale study of reconstruction
assistance to Afghanistan that may include GSDF dispatch for
non-military activities (Nikkei)
12) China may be carrying out ballistic missile tests in the Yellow
Sea (Sankei)
13) U.S,, Japan considering new Pacific strategy (Sankei)
14) Secret documents uncovered by researcher on plans for a Korean
contingency (Asahi)

15) Fukuda vision on the global environment problem focuses on
emissions trading (Nikkei)

Political agenda:
16) Opposition camp hurriedly trying to adopt Upper House bill that
would scrap the controversial medical system for elderly (Asahi)
17) Democratic Party of Japan (DPJ) increasingly unlikely to submit
censure motion against the prime minister (Sankei)
18) DPJ head Ozawa comes out against increasing the consumption tax
(Sankei)
19) Ozawa again sets off on a stumping tour aimed at the next
election (Yomiuri)
20) Prestigious private panel urges each party to ready a manifesto
with clear policy statements (Sankei)
21) Farm policy clique in the Diet blasts Chief Cabinet Secretary
Machimura for calling for revision of rice acreage reduction program
(Sankei)

Articles:

1) TOP HEADLINES

Asahi:
Children moved out of quake-hit China areas without knowing of
parents' death

Mainichi:

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Towns deserted due to fears of flooding from quake lakes

Yomiuri:
U.N. secretary general calls for abolition of export restrictions at
Food Summit

Nikkei:
Government plans to include emissions trading scheme in "Fukuda
Vision" of global warming measures

Sankei:
China believed to have test-launched ballistic missile in Yellow Sea


Tokyo Shimbun:
Food Summit opens: Japan to discharge 300,000 tons of imported rice
and extend an additional 50 million dollars in aid

Akahata:
Public health program for elderly must be abolished

2) EDITORIALS

Asahi:
(1) Children must know about risks associated with cell phones
(2) Ainu resolution a historic step

Mainichi:
(1) Recovery of public trust takes zeal and swiftness on part of
police
(2) Fiscal 2009 budget: Fiscal System Council must stick to its
principles

Yomiuri:
(1) 2nd-generation biofuel could solve food crisis
(2) Daylight saving time should be introduced

Nikkei:
(1) Short- and long-term perspectives necessary for solving food
crisis
(2) FTA with ASEAN must be ratified swiftly

Sankei:
(1) Fiscal reconstruction: 2006 policy guidelines must be
maintained
(2) Soaring oil prices: Speculative funds must be monitored jointly

Tokyo Shimbun:
(1) Public health system for elderly requires improvements
(2) Tax hike must not be predetermined conclusion for Fiscal System
Council

Akahata:
(1) Fiscal System Council report far from giving peace of mind

3) Prime Minister's Official Residence (Kantei)

Prime Minister's schedule, June 2 & 3

NIKKEI (Page 2) (Full)
June 4, 2008


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June 2

Afternoon
Arrived at Intercontinental Hotel in London.

Evening
Departed from Heathrow Airport.

Night
Arrived at Leonardo da Vinci Airport in Roma. Stayed at Hotel The
Westin Excelsior.

June 3

Morning
Met with Sri Lankan President Rajapaksa at UNFAO headquarters.
Delivered speech at Food Summit hosted by FAO.

Afternoon
Met with French President Sarkozy. Met later with Iranian President
Ahmadi-Nejad. Returned to Hotel The Westin Excelsior.

Evening
Met with Italian Prime Minister Berlusconi at the prime minister's
office.

4) Hiranuma asks that North Korea be kept on designated list of
countries sponsoring terrorism

MAINICHI (Page 5) (Full)
June 4, 2008

Independent lawmaker Takeo Hiranuma, who chairs the Abduction
League, a nonpartisan group of Diet members, yesterday paid a call
on U.S. Ambassador to Japan Schieffer at the Embassy to urge that
North Korea not be removed from the list of countries sponsoring
terrorism. Hiranuma stressed: "It is extremely regrettable that
there are moves to remove it from the list." According to Hiranuma,
the Ambassador reportedly replied: "The President's views have not
changed from before."

5) Japan to release 300,000 tons of imported rice: Fukuda

TOKYO SHIMBUN (Top play) (Full)
June 4, 2008

ROME-Prime Minister Yasuo Fukuda delivered a speech in a global food
summit that opened in Rome on the morning of June 3 or on the
afternoon of June 3 Japan time. In the speech, Fukuda announced a
package of emergency measures to cope with skyrocketing grain
prices. Specifically, Fukuda stated that Japan would release more
than 300,000 tons from its stock of imported rice for countries that
can hardly secure rice and that Japan would provide additional aid
amounting to 50 million dollars (approximately 5.2 billion yen).

Japan, for its release of imported rice, will use rice that Japan
has imported in conformity with minimum access import quotas set by
the World Trade Organization (WTO).

"We will make efforts to stabilize supply and demand by improving
our food self-sufficiency," Fukuda said, stressing that Japan will
improve its food self-sufficiency that is now below 40 PERCENT .

TOKYO 00001519 004 OF 013

The 50 million dollars is an additional slot to help developing
countries buy seedlings and fertilizers needed to expand their food
production. The Japanese government has already translated its
decision on emergency food aid into action, including 100 million
dollars for emergency food aid and 10 million dollars intended to
help developing countries step up their food production.

Fukuda advocated establishing an international system to oversee the
market influx of speculative money that pushes up food prices. "We
should demonstrate out strong political intention to watch," he
said. He also referred to grain-producing countries that restrict
their exports. "We want to call on them to abstain from taking such
restrictive action," he stressed.

Biofuel production from corn and other grains has led to
skyrocketing grain prices. In view of this fact, Fukuda suggested
the need to study the feasibility of second-generation biofuel that
is not made from food crops.

Fukuda's speech gisted

? Fukuda advocated establishing an international regime to oversee
speculative transactions on agricultural markets.
? The Japanese government will release more than 300,000 tons from
its stock of imported rice in emergency aid.
? It is urgently necessary to study the feasibility of
second-generation biofuel that is not made from food crops.
? Each country should abstain from restricting its food exports.
? Japan will outlay 50 million dollars in additional aid for more
food production.
? Japan will improve its food self-sufficiency and contribute to the
global supply and demand of food.
? The G-8 Toyako summit should send a strong message to resolve the
food crisis.

6) Main points of Prime Minister Fukuda's speech at UN Food Summit;
Politics needs to monitor moves for speculative food investment

NIKKEI (Page 2) (Full)
June 4, 2008

The following is a gisting of Prime Minister Yasuo Fukuda's speech
given at the Food Summit.

I feel a strong sense of urgency. We must put together ideas and
take action. I believe the "Comprehensive Framework for Action"
introduced by United Nations Secretary General Ban Ki Moon is a very
important foundation.

Japan has announced it will implement emergency food aid worth $100
million or so by July. As additional aid to poor farmers for
increasing food production, Japan will immediately offer
approximately $50 million. Japan is also ready to release 300,000
tons of rice or more out of the imported rice stored by the
government as emergency rice stocks. I will call on other countries
to release their emergency food stocks to the international market.

If there are any speculative aspects about the current state of the
food market, I deem it necessary for politics to demonstrate strong
will to monitor it. We must also discuss how to build a system that
can secure a political will. I'd like to call on other countries to

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use moderation in restricting exports of agricultural products.

In order to resolve the food crisis, I deem it essential for each
country to strengthen its agricultural production. Japan will make
efforts to contribute to stabilizing world food supply and demand by
improving the food self-sufficiency. It is urgently necessary to
improve agricultural productivity in developing countries. The
international community needs to pay special attention to the
agricultural sector and increase aid to it.

The current soaring food prices are apparently related to new
factors. First, we need to seriously address measures to deal with
climate change. The way developing countries are farming needs to
adapt to climate change. Second, in order to avoid cases of world
food security being threatened by biofuel, it is necessary to study
the second-generation biofuel that will not use food for fuel and
put ideas into practical use as quickly as possible so that
production will be sustainable.

I am determined to jointly send a strong message in this regard at
the upcoming Group of Eight Hokkaido Toyako Summit in July.

7) Food issue a difficult challenge for Japan as chair of Lake Toya
Summit

NIKKEI (Page 3) (Full)
June 4, 2008

(Fumiyoshi Kendo, Rome)

In a speech at a United Nations' food summit in Rome, Prime Minister
Fukuda stressed his commitment to dealing with the ongoing global
food crisis as the chair of the Group of Eight (G-8) Summit (Lake
Toya Summit) in July. Fukuda aims at adopting a joint document on
the food issue at the Lake Toya Summit, based on a declaration to be
unveiled by the food summit on June 5. But it will not be easy to
iron out differences in the participants' views reflecting their
interests.

One of the points of contention is biofuel. Japan has been calling
for research to start to develop a biofuel that does not use food
crops. But since it will take time to put it to practical use, this
plan will not serve to immediately resolve the ongoing dispute
between the U.S. and Brazil, which are stepping up production, and
countries which are calling on them to review their policy.

Meanwhile, it is necessary for the chair of the Summit to give
consideration so as not to escalate the dispute. In the speech,
Fukuda skipped this part: "It is true that there is a case in which
biofuel production conflicts with food supply." The conflict of
interest is also growing serious between developing countries
suffering from a food crisis and food producing countries placing
food export restrictions.

Within the nation, the prime minister will be put up to the test
over agricultural reform aimed to improve the nation's food
self-sufficiency, which has dropped to 39 PERCENT on a calorie
basis. The Liberal Democratic Party's food strategy taskforce
(headed by Koichi Kato), launched under the instruction of the prime
minister, has started a discussion on reviewing such systems as
supply, procurement from overseas, and stockpiling.


TOKYO 00001519 006 OF 013


For the LDP, however, agriculture is a delicate theme, as seen from
the eruption of quick objections to Chief Cabinet Secretary Nobutaka
Machimura's reference to a review of the current rice production
adjustment. Stormy negotiations are expected in future talks on this
issue.

8) Fukuda urges Iranian president to end uranium-enrichment program

YOMIURI (Page 2) (Full)
June 4, 2008

(Tsuyoshi Endo, Rome)

Prime Minister Fukuda held a meeting with Iranian President Mahmoud
Ahmadinejad at the Food and Agriculture Organization in Rome for
about 50 minutes on the afternoon of June 3, local time. Referring
to Iran's nuclear program, the prime minister said: "I ask you to
suspend your nation's uranium-enrichment program." But the president
indicated that Iran would continue the program, rebuking him: "It is
impossible. Why do we have to end the program?" He then denied the
allegation that Iran is developing nuclear weapons, saying: "Even if
we possess nuclear weapons, we will not be able to use them, because
such weapons are inefficient."

Fukuda also took up the incident in which a Yokohama National
University student has been kidnapped for nearly eight months and
asked the president to cooperate in releasing him at an early date.
Ahmadinejad replied: "We are making utmost efforts to have him
returned to his family.

9) Prime Minister Fukuda meets with European leaders in effort for
confidence-building; Agrees with French president on cooperation to
deal with climate change

NIKKEI (Page 2) (Excerpts)
June 4, 2008

Fumiyoshi Indo

Prime Minister Fukuda yesterday met separately with French President
Sarkozy and Italian Prime Minister Berlusconi, winding up his major
events on his European tour. The prime minister apparently has now
achieved his initial goal of building a personal relationship of
trust with each country's leader so that he will be able to smoothly
put together ideas as to how to reduce greenhouse gas emissions at
the Upcoming Group of Eight (G-8) Hokkaido Toyako Summit in July.

In the Japan-France summit talks, both leaders confirmed a plan to
discuss measures for the international community to deal with
soaring oil prices. Sarkozy sought to establish a framework that
will involve all major emitters of greenhouse gases. In response,
Fukuda promised to work together with the president on this matter.

Sarkozy suggested expanding the G-8 summit framework, an idea he has
previously advocated. Fukuda told Sarkozy: "I think it is meaningful
for a limited number of leaders of major countries to exchange views
frankly. One idea is to have discussion with emerging economies at
an expanded summit forum." Sarkozy also indicated his continued
intention to give strong support to Japan's bid for a permanent seat
on the United Nations Security Council.

For Fukuda, who is to host the upcoming G-8 Summit, his tour of

TOKYO 00001519 007 OF 013


Europe this time is an important opportunity. Fukuda previously had
telephone conferences with German Chancellor Merkel and British
Prime Minister Brown, but until recently he has not met with them.
During this European tour, Fukuda had his first conversations with
Salkozy and Berlusconi respectively.

It would be difficult to produce successful results without personal
relationships of trust with other countries' leaders. So, Fukuda
prioritized his European tour this time over the political calendar
at home, such as Diet discussions in the latter days of the Diet
session. Some meetings with leaders of European countries did not
last for one hour, but Fukuda has now accomplished his goal of
meeting with as many leaders as possible.

10) Former Vice Foreign Minister Nogami becomes advisor to Mizuho
Corporate Bank

NIKKEI (Page 7) (Full)
June 4, 2008

Mizuho Corporate Bank announced yesterday that it has appointed
former Vice Foreign Minister Yoshiji Nogami, 65, as its adviser. He
will offer advice to the bank's management regarding its
international strategy.

Nogami, a former Economic Affairs Bureau chief and deputy foreign
minister for economic affairs, is an expert on the economy. He is
also well-versed in the political and economic situations in the
Middle East, a region in which the bank is trying to shore up its
operations. Nogami assumed the post this week in compliance with the
bank's request. Nogami became vice foreign minister in 2001. He
resigned from the post the following year due to a conflict with
then Foreign Minister Makiko Tanaka. Afterward, he served as
minister and then ambassador to Britain until May this year.

11) Government to start discussion on land-based reconstruction
activities in Afghanistan

NIKKEI (Page 2) (Excerpts)
June 4, 2008

The government will start a full-scale discussion on land-based
reconstruction aid in Afghanistan. Reflecting industrialized
countries' strong awareness that stabilizing Afghanistan is
indispensable for success in the fight against terrorism, the
government is considering the possibility of dispatching Ground
Self-Defense Force (GSDF) troops to Afghanistan. With an eye on the
expiration next January of the special law to allow the Maritime
Self-Defense Force's refueling mission in the Indian Ocean, the
government aims to prepare more options in an effort to obtain
support from the Democratic Party of Japan for its plan to extend
the MSDF mission.

In a speech in late May, Chief Cabinet Secretary Nobutaka Machimura
said: "The government is about to start a discussion on the
possibility of Japan's ground-based personnel contributions in
Afghanistan." Set off by this, Foreign Minister Masahiko Koumura
also said in a press conference yesterday: "The government has
already discussed what Japan can do for Afghanistan from a broad
point of view."

Observers expect that the government will consider having GSDF

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troops provide logistic support to the International Security
Assistance Force (ISAF) under the North Atlantic Treaty Organization
(NATO) or provincial reconstruction teams (PRT). The government had
previously insisted that the GSDF is not constitutionally allowed to
take part in ISAF, which is engaged in security operations. But a
government source said: "If activities are limited to backup support
in noncombat areas, there will be no problem legally."

Negotiations on GSDF troops' land-based activities in Afghanistan
will unavoidably run into trouble. A new law will become necessary
if a decision is made to dispatch GSDF troops. The government will
be required to enact new legislation or to revise the law endorsing
the MSDF refueling mission in the Indian Ocean. Either way, the
government will have to engage in difficult coordination with the
Democratic Party of Japan, which has control of the House of
Councillors.

12) China may be testing ballistic missiles in the Yellow Sea

SANKEI (Top play) (Excerpts)
June 4, 2008

It was learned yesterday from intelligence analysis by the Defense
Ministry and the U.S. Forces Japan that there is a high probability
China's Navy in late May carried out the testing of ballistic
missiles (SLBM), scheduled to be mounted on state-of-the-art
submarines, in the Yellow Sea in a direction facing west toward the
Korean Peninsula. The SLBMs that were launched appear to have been
JL2 types now being developed. An investigation and analysis has
begun on the details by the Defense Ministry's Intelligence
Headquarters and other offices.

According to the Defense Ministry, the missile launch was carried
out on May 29. They were launched from a Golf-class ballistic
missile submarine constructed for use in developing the JL2
missiles. The JL2 missile has a range of 8,000 kilometers, placing a
portion of the U.S. mainland under its range. Reportedly, the
missile will be mounted on an atomic powered submarine that is the
Chinese Navy's newest model, the 094-type.

13) Japan, U.S. may review Pacific strategy

SANKEI (Page 1) (Full)
June 4, 2008

China is believed to have test-launched a new submarine-launched
ballistic missile (SLBM) in the midst of relief activities for
Sichuan earthquake victims. This will likely have major
repercussions not only on Japan and the United States but also on
Taiwan and other neighbors, including India.

China has now brought its new nuclear-powered submarine, which is
called Type 094 and loaded with the Julang-2, to the island of
Hainan, where China's South Sea Fleet is based. This is more
evidence that clearly shows China's south-oriented strategy.

On their way to Pacific waters, nuclear-powered submarines with
China's North Sea Fleet and conventional-type submarines with its
East Sea Fleet pass through Japan's southwestern islands, where
Japan and the United States are conducting warning and surveillance
activities. They could be therefore spotted easily.


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However, Japan and the United States are less wary of naval moves in
the southern waters down from Hainan. It is easy to pass through the
Bashi Channel between Taiwan and the Philippines, as the waters
there are deep. Moreover, Hainan is also situated near the disputed
Spratly Islets.

Hainan Island is a strategic keystone that is indispensable for the
defense of sealanes from the Indian Ocean to China's mainland
through the Straits of Malacca.

A 094-Type (Jin-class) nuclear-powered submarine loaded with
Julang-2 missiles, if deployed to Hainan Island, could cover some
parts of the U.S. mainland. In addition, India will be also within
range. India is considerably wary of China's deployment of a
Jin-class nuclear-powered submarine to Hainan Island.

Jane's Intelligence Review, a British journal on military affairs,
says the Chinese navy has tunneled a hill in Hainan Island's
southern coastal city of Sanya to build a large underground
submarine base.

A submarine surfaces when leaving and returning to port, so it can
be spotted by a military satellite. However, a satellite cannot
detect underground-based submarines. The U.S. Navy and the Maritime
Self-Defense Force, which are wary of China's naval advance into the
Pacific Ocean, will therefore likely be urged to review their
Pacific strategy.

14) Secret pact on contingency on Korean Peninsula discovered; Prior
consultations unnecessary for U.S. military activities

ASAHI (Page 1) (Excerpts)
June 4, 2008

A book of minutes on a contingency plan for the Korean Peninsula --
a secret Japan-U.S. agreement -- allowing the United States to use
U.S. bases in Japan without prior consultations with Japan in the
event of a contingency on the peninsula has been found at the
University of Michigan Gerald R. Ford Presidential Library. Although
the existence of a secret pact has widely been believed from
connected U.S. government documents, this is the first time that the
full text of the pact has become clear. The Japanese government has
consistently denied the existence of such a pact.

The document in question is a book of minutes dated June 23, 1960,
signed by then Foreign Minister Aiichiro Fujiyama and then U.S.
Ambassador to Japan Douglas MacArthur II. The minutes have been
attached to a memorandum on the use of U.S. bases in Japan in the
event of a contingency on the Korean Peninsula in 1974, in the
closing days of the Nixon administration. They appear to be
documents handed down to the incoming Ford administration. They were
declassified in March 2005. Nagoya University Graduate School
Professor Mikio Haruna obtained copies of the documents at the
presidential library in late February this year.

The minutes consist of two pages of statements made by Fujiyama and
MacArthur at the Japan-U.S. Security Consultative Committee
preparatory meeting held on June 23, 1960. Regarding exceptional
measures in an emergency situation resulting from an attack on UN
troops in South Korea, Fujiyama, while prefacing that he was
commissioned by then Prime Minister Kishi, stated the Japanese
government's view that (the United States) was allowed to use

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facilities and areas in Japan for military operations that must be
carried out immediately. The minutes were signed by Fujiyama and
MacArthur.

The full text of the minutes is attached to the 1974 memorandum that
says, "This is to allow U.S. forces in Japan to embark on military
operations without prior consultations with the Japanese government
in the event of a contingency on the Korean Peninsula." (The United
States) was considering whether to obtain approval from Japan for an
extension of the minutes.

Comment by University of the Ryukyus Professor Masaaki Gabe: The
documents have probably been declassified because given the Law on
Situations in Areas Surrounding Japan, there is no longer a need for
the secret pact. From what was discussed between Japan and the
United States back then, it is clear that to the United States, the
largest objective of U.S. bases in Japan was directly linked to a
contingency on the Korean Peninsula.

15) Government decides to include emissions trading scheme in
"Fukuda Vision" of global warming measures: Steel, power companies
conditionally agree

NIKKEI (Top Play) (Abridged slightly)
June 4, 2008

The government has decided to include in the "Fukuda Vision" of
global warming measures to be mapped out in mid-June a policy of
incorporating a plan to consider adopting an emissions trading
system applied to domestic emissions of greenhouse gases. The move
is due to leading steel and power companies, including Nippon Steel
and TEPCO, having switched their stance to conditionally accepting
the introduction of the system. The government also plans to come up
with a long-term goal of cutting domestic emissions by 60 PERCENT
to 80 PERCENT by 2050. The next focus of attention will be how to
map out a mid-term goal covering the 2020-2030 period.

Still opposition to mandatory emissions cuts

The Fukuda Vision is aimed at underscoring Japan's stance of
tackling the creation of a post-Kyoto Protocol framework for
emissions cuts starting in 2010 in the run-up to the G-8 to be held
in Hokkaido in July.

The steel industry is Japan's largest emitter, accounting for about
10 PERCENT of domestic carbon emissions. It has thus far been
opposing the adoption of emissions trading, noting that if such a
system is adopted, production would be increasingly transferred
abroad, causing a decline in the Japanese steel industry's
international competitiveness and putting a dent in domestic
employment. The power industry has also pointed out that the
adoption of the system would make it difficult for it to make
capital investment from a long-term perspective.

Nippon Steel will start full-fledged talks with the government on
the creation of a system and when to adopt it through the Japan Iron
and Steel Federation and power companies through the Federation of
Electric Power Companies of Japan. Both industries are strongly
opposed to the government setting mandatory emissions quotas. They
intend to seek the flexible imposition of emissions quotas that
reflect emissions reduction efforts by manufacturers.


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Prime Minister Yasuo Fukuda on May 21 indicated eagerness to adopt
an emissions trading scheme, noting, "Such a system will become
necessary over the next five to ten years."

16) Opposition camp is hurrying to adopt bill scrapping the medical
system for the elderly over 75

ASAHI (Page 4) (Excerpt)
June 4, 2008

With the Diet session soon to close, maneuvering between the ruling
and opposition camps has been intensifying. The four opposition
parties, which have agreed to scrap the system of medical services
set up for the elderly over 75, are planning to heighten their
attacks on the ruling parties, with the possibility of filing a
censure motion against the prime minister in mind. Meanwhile, the
ruling parties, concerned that it is losing popular support, is
rushing to revise the controversial system.

17) DPJ likely to forgo submitting censure motion against prime
minister to current Diet session

NIKKEI (Page 2) (Full)
June 4, 2008

The view gained ground yesterday in the main opposition Democratic
Party of Japan (DPJ) that the party should forgo plans to submit to
the House of Councillors a censure motion against Prime Minister
Yasuo Fukuda during the current Diet session. The reason is that it
does not appear likely that the DPJ will be able to force a
dissolution of the House of Representatives and a snap election,
because a censure motion has no binding force. A senior party member
clearly stated yesterday: "A motion should not be submitted." The
prevailing view in the party is that a censure motion should be
saved until an extraordinary session of the Diet.

Since some in the party advocate taking a hard line, the DPJ
leadership will make a final decision after seeing the public
response to the new health insurance scheme for those aged 75 or
older, as well as the prime minister's stance in a party-head debate
on June 11.

President Ichiro Ozawa stated in a press meeting yesterday in Sendai
City: "Depending on the circumstances, the party leadership will
make a decision."

18) Ozawa says DPJ will oppose consumption tax hike in Lower House
election

SANKEI (Page 5) (Full)
June 4, 2008

When asked about his party's position on a consumption tax hike
issue at a press conference in the city of Sendai, Democratic Party
of Japan (DPJ) President Ichiro Ozawa stated yesterday:

"What should be done at first are to end the waste of tax money and
to slim down the corrupted government offices. Otherwise, we won't
be able to get public understanding for the tax systems. By strictly
eliminating the waste of tax money, the state will have huge
financial resources for the time being. We will play this up in the
next House of Representatives election."

TOKYO 00001519 012 OF 013

Ozawa indicated that the largest opposition party would incorporate
its position of opposing a consumption tax increase and of keeping
the present tax rate as is in its manifesto (a set of campaign
pledges) for the next Lower House election similar to what it did in
last year's House of Councillors election.

He emphasized that the DPJ would push ahead with measures to slim
down the government offices by shedding light on how tax money has
been wasted, and by providing local governments with government
subsidies in a lump sum, and that the party would implement
decentralization before raising taxes.

In a meeting to exchange views with residents in Sendai City, which
took place before the press conference, Ozawa said: "When money is
lacking even after making efforts to putting an end to a waste of
money, we will then ask the public about a consumption tax hike."

19) DPJ President Ozawa resumes stumping nationwide

YOMIURI (Page 4) (Full)
June 4, 2008

Democratic Party of Japan (DPJ) President Ichiro Ozawa has resumed
his nationwide stumping tour for the next House of Representatives
election, visiting yesterday Miyagi Prefecture. He plans to visit 12
prefectures, including Niigata and Fukuoka, in about a month, ending
his tour on July 1. He is expected to exchange views there with
senior members of regional chapters of Rengo (Japan Trade Union
Confederation). While many in the ruling parties are now in favor of
putting off a Lower House election, it seems Ozawa is still trying
to force an early dissolution of the Lower House.

Holding yesterday a meeting with elderly people in Sendai, Ozawa
there played up his party's policy, saying: "Without a consumption
tax hike, we will be able to survive for the time being if (the
government offices) stop wasting money." He afterwards held a press
conference in the city, in which he said:

"Our target is to win a majority of the single-seat constituencies
of all the prefectures. (There are a total of 25 single-seat
districts.) We want to secure more than 13 seats in the Tohoku
region."

The DPJ will hold its party leadership race in September. Some in
the party view that Ozawa is fretting about strengthening his
political footing for a third term by stumping local areas.

20) 21st Century Ad Hoc Council for Promotion of Administrative
Reform urges political parties to map out manifesto at early date -
proposal for realizing election for voters to choose LDP or DPJ

SANKEI (Page 5) (Full)
June 4, 2008

The National Council to Create a New Japan (joined by 21st Century
Ad Hoc Council for Promotion of Administrative Reform Co-Chairman
Takeshi Sasaki, former President of Tokyo University, Masaru Nishio,
executive director of the Tokyo Institute for Municipal Research,
and others) yesterday released a set of emergency proposals
regarding the current party politics. The report seeks political
parties to formulate a manifesto for the next Lower House election

TOKYO 00001519 013 OF 013


at an early date.

The set of proposals stresses the need for an election for voters to
choose whether it will be the Liberal Democratic Party (LDP) or the
Democratic Party of Japan (DPJ or Minshuto), based on policy debate,
saying that with the emergence of various challenges, such as social
security and environmental issues, the stage in which (the LDP) can
manage the administration, emboldened by its victory in the postal
privatization election in 2005 is over. The panel notes in the
report that it expects various political parties will deepen their
shared perception and intraparty discussion through the Sentaku (the
word has a double meaning -- 'choice' and 'cleaning up') Lawmakers
Federation," a suprapartisan organization teamed up with the
"Sentaku," a national movement organization under the 21st Century
Ad Hoc Council. The report also includes a plan to host a manifesto
formulation promotion rally between October and November this year,
inviting responsible persons from various political parties. The
report also says that a full-fledged policy discussion will be
necessary for the DPJ presidential election slated for September, as
it is a venue where the DPJ's candidate for the premiership is
finally decided, adding that it is ready to host a debate session
joined by candidates for the premiership from all political
parties.

21) Farm policy clique in the Diet blasts Chief Cabinet Secretary
Machimura for calling for revision of rice acreage reduction
program

SANKEI (Page 5) (Full)
June 4, 2008

Chief Cabinet Secretary Nobutaka Machimura in a speech on May 31
noted, "It is a waste for Japan to adopt a farm acreage reduction
policy when some countries are suffering from food shortages. Japan
might be able to help ease the sharp rise in food prices in the
world if it revises its acreage reduction policy." This statement
has created quite a stir.

The Liberal Democratic Party (LDP) agricultural policy clique has
lashed out fiercely at Machimura's statement. Former Secretary
General Koichi Kato blasted Machimura's proposal: "His idea is for
Japan to send rice abroad as aid. It is a proposal like a household
receiving social welfare payments donating 100,000 yen to a
community festival." Former Secretary General Tsutomu Takebe during
the party officers' liaison council meeting also criticized
Machimura's statement, saying, "I want him to be cautious when he
makes such a statement, because rice prices could plummet as a
result." Secretary General Bunmei Ibuki during a press conference
the same day complained: "His proposal may be correct over the long
term. However, if it creates a misperception that it is a short-term
policy, agricultural policy would be undermined."

Following those critical remarks, Machimura during a press briefing
the same day explained, "I did not say that the acreage reduction
policy should be revised this year."

SCHIEFFER

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