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Cablegate: Japanese Morning Press Highlights 06/11/08

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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;
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 06/11/08

Index:


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

4) LDP and New Komeito approve extensions of SDF dispatches to
Indian Ocean and Iraq (Mainichi)

5) Amended child-pornography bill being presented to the Lower House
but likely to be carried over until the next session (Mainichi)

North Korea problem:
6) Japan aiming at progress on the abduction front as talks with
North Korea restart today (Nikkei)
7) Foreign Minister Koumura says if progress achieved on abduction
issue with North Korea, Japan would consider something in return
(Asahi)
8) North Korea lets out the word that it expects Japan to pay 4.2
billion yen in energy money in return for its denuclearization
(Asahi)
9) Under Secretary of State Burns in Tokyo says he hopes to see
results in Japan-DPRK talks (Nikkei)

10) Japanese government seeking international recognition of an
extension of its ocean shelf, the aim being to exploit natural
resources in that sea area (Yomiuri) 7

Diet affairs:
11) Diet being extended to June 21 in order to ratify crucial EPA
with ASEAN (Tokyo Shimbun)
12) Democratic Party of Japan's (DPJ) to submit a censure motion
against Prime Minister Fukuda today but atmosphere in the Diet lacks
tension (Tokyo Shimbun)
13) DPJ head Ozawa is starting to hear criticism from his own party
for his unrelenting confrontational mode against the ruling camp
(Yomiuri)
14) Ruling parties approve revisions to the controversial medical
system for the elderly that are hoped to assuage public opinion
(Tokyo Shimbun)
15) DPJ to put off resolution of the pending appointment of a top
BOJ official, making it likely that the post will be indefinitely
empty (Nikkei)
16) Economic policy guidelines: Prime Minister Fukuda firm on
expediting reforms, will not allow "sacred areas" to exist in social
security expenditures (Mainichi)

Articles:

1) TOP HEADLINES

Asahi:
Government to provide 1,070,000 households on welfare with
terrestrial digital tuner

Mainichi:
Mass murder in Akihabara: Suspect Kato told he would be fired 9 days
before incident

Yomiuri:
Supreme Court's first ruling that there is no need to pay original

TOKYO 00001588 002 OF 011


principal to loan sharks deals blow to them

Nikkei:
Government to set four conditions not to impose corporate tax with
the aim of promoting foreign investment in Japan

Sankei:
Government and ruling bloc expected to adopt the ruling bloc's
project team's proposal to make automatic deduction of premium for
the medical system for elderly optional in the case of pension being
below 1.8 million yen

Tokyo Shimbun:
Mass murder in Akihabara: Suspect Kato confesses discontent with his
life

Akahata:
Government gives up on making final appeal against lawsuit by
atomic-bomb victims

2) EDITORIALS

Asahi:
(1) Hillary Clinton withdraws from Democratic primary race: When
will the glass ceiling collapse?
(2) Swimmers now may wear new Speedo LZR Racer swimsuit at Beijing
Olympics: Swimmers should be able to display their ability to the
full

Mainichi:
(1) New criteria necessary to provide relief to many more
atomic-bomb victims
(2) Flood disaster summit: Reduce disasters with regional
cooperation

Yomiuri:
(1) Lawsuit by atomic-bomb victims: Government needs to use high
court's decisions when recognizing atomic-bomb survivors
(2) Japanese swimsuit companies fall behind Speedo in development of
new products

Nikkei:
(1) Measures against soaring oil prices now bring up monetary issue
(2) Hokkaido is best place for adoption of daylight saving time

Sankei:
(1) One month after Sichuan earthquake: Information reveals the
shortest way to recovery
(2) Conditions to fight world rivals now set as Japanese swimmers
allowed to wear Speedo's LZR Race swimsuit in Beijing Olympics

Tokyo Shimbun:
(1) Fukuda vision on climate change needs to be modified
(2) Political turmoil in ROK: Pragmatism needed for the public's
sake

Akahata:
(1) Fukuda vision on climate change: It's folly to use the setting
of targets as a bargaining chip

3) Prime Minister's Official Residence (Kantei)


TOKYO 00001588 003 OF 011


Prime Minister's schedule, June 10

NIKKEI (Page 2) (Full)
June 11, 2008

08:52
Attended a cabinet meeting.

09:19
Met MAFF Minister Wakabayashi and Chief Cabinet Secretary Machimura,
followed by Justice Minister Hatoyama, MHLW Minister Masuzoe, and
Machimura. Masuzoe and Machimura stayed on. Afterward met National
Public Safety Commission Chairman Izumi.

09:51
Met U.S. Ambassador to Japan Schieffer and his wife at the Kantei.

11:00
Met Science Council of Japan Chairman Kanazawa and Vice Chairman Doi
in the presence of Science and Technology Minister Kishida, Cabinet
special adviser Kurokawa, and others. Afterward met Economic and
Fiscal Policy Minister Ota in the presence of Assistant Chief
Cabinet Secretary Saka. Ota stayed on.

12:18
Had lunch with LDP third-term members in the presence of Deputy
Chief Cabinet Secretary Ono, joined by Machimura.

14:10
Met Cabinet Intelligence Director General Mitani, followed by Lower
House National Basic Policy Committee Chairman Eto and principal
director Hagiyama, followed by Vice Foreign Minister Yabunaka Asian
and Oceanian Affairs Bureau Director General Saiki. Yabunaka stayed
on.

15:30
Met New Komeito head Ota, LDP Secretary General Ibuki, New Komeito
Secretary General Kitagawa in the presence of Machimura.

16:05
Met assistant Ito. Later attended a CEFP meeting.

18:13
Met Prime Minister Vanhanen of Finland, followed by a joint press
conference.

19:03
Hosted a dinner party.

20:24
Returned to his official residence.

4) Ruling parties OK extending SDF missions in Iraq, Indian Ocean

MAINICHI (Page 5) (Full)
June 11, 2008

The ruling Liberal Democratic Party and its coalition partner, New
Komeito, approved the government's plans yesterday to extend the
Maritime Self-Defense Force's refueling mission in the Indian Ocean
until Jan. 15 next year and the Air Self-Defense Force's airlifting
mission in Iraq until the end of July next year. Prime Minister

TOKYO 00001588 004 OF 011


Yasuo Fukuda's cabinet is expected to endorse the plans on June 13.

The Iraq Special Measures Law and the Antiterrorism Special Measures
Law, under which the MSDF and the ASDF are on their respective
missions, are set to run out when the plans expire. There is no
change in the ASDF and MSDF activities.

5) Ruling bloc submits bill amending child pornography law to Lower
House; Continued deliberations eyed

MAINICHI (Page 2) (Full)
June 11, 2008

The Liberal Democratic Party and its coalition partner New Komeito
yesterday submitted to the House of Representatives a
lawmaker-initiated bill amending the Law for Punishing Acts Related
to Child Prostitution and Child Pornography designed chiefly to ban
the simple possession of child pornography. With the close of the
current Diet session only days away, the two parties plan to carry
deliberation on the bill to the next extraordinary Diet session in
the fall to aim at its enactment in that session after holding talks
with opposition parties. The ruling bloc's plan is designed to
totally ban the simple possession of child pornography, saying,
"Child pornography must not be possessed at will." Meanwhile, the
major opposition Democratic Party of Japan's plan is intended to ban
only cases in which child pornography is obtained in exchange for
remunerations. Twists and turns are expected before a settlement
line is reached.

6) Japan-North Korea formal talks start today: Japan aims at moving
abduction issue forward

NIKKEI (Page 2) (Full)
June 11, 2008

Japan and North Korea will hold a two-day formal meeting in Beijing,
starting today. Full-fledged talks will be the first since the
second round of the working group meeting on Japan-North Korea
normalization held in Ulan Bator under the six party talks in
September last year. Japan wants to pave the way for achieving a
tangible progress on the abduction issue. However, North Korea's
response is unclear.

The meeting will bring together Akitaka Saiki, director general of
the Foreign Ministry Asian and Oceanian Affairs Bureau, and
Ambassador Song Il Ho in charge of normalization talks with Japan
from North Korea. Talks will be held on the afternoon of the 11th
and all day on the 12th. A dinner meeting is also scheduled for the
evening of the 11th.

Foreign Minister Koumura during a press briefing on the 10th said,
"If the North Korean side takes a concrete action, taking a big step
forward, then we will also take a concrete action, taking a big step
forward." He thus indicated the government's stance of taking a
forward-looking measure, if there is a tangible progress over the
abduction issue.

7) Something likely in return for progress on abductions: Koumura

ASAHI (Page 4) (Full)
June 11, 2008


TOKYO 00001588 005 OF 011


Japan and North Korea will hold a formal meeting of working-level
officials from their foreign ministries in Beijing on June 11-12 to
discuss their matters of concern, including abductions and past
issues. Attention will focus on how North Korea will respond to
Japan's call for specific progress on the pending issue of Japanese
abductees.

Japan and North Korea have held no formal talks since their working
groups met in September last year on diplomatic normalization.
Following an informal meeting held on June 7, the formal meeting
this time will be held with the participation of the Foreign
Ministry's Asian and Oceanian Affairs Bureau Director General
Akitaka Saiki from Japan and Song Il Ho, ambassador for negotiations
over the normalization of diplomatic relations between North Korea
and Japan, from North Korea.

Foreign Minister Koumura, meeting the press yesterday, indicated
that Japan would consider something in return, such as easing
Japan's sanctions, depending on progress on the abductions issue.
"If they take a big step forward, we will also take a big step
forward for specific action.

According to informed sources, North Korea may offer to turn over
Japan Airlines hijackers. The United States cites this issue as one
of its reasons for listing North Korea as a state sponsor of
terrorism. Tokyo's Metropolitan Police Department has placed one of
the hijackers on Interpol's international wanted list on suspicion
of abducting Keiko Arimoto.

North Korea could bring up the hijackers issue as a possible card
that can move its relations with Japan and the United States forward
at the same time. Pyongyang wants Tokyo to ease Japan's sanctions on
North Korea, gain ground for Japan's humanitarian aid, and dodge
Japan's pursuit of North Korea over the abductions issue. However,
Koumura says turning over the hijackers can hardly be called
progress on the abductions issue.

8) N. Korea demands 4.2 billion yen from Japan in return for
denuclearization

ASAHI (Page 11) (Abridged)
June 11, 2008

SEOUL-North Korea is calling for an anthracite coal gasification
facility to be constructed as economic and energy aid in return for
its denuclearization steps, South Korean government officials
revealed yesterday. North Korea wants Japan to shoulder 40 million
dollars (approx. 4.2 billion yen) to share the cost of
construction.

On June 5, an economic and energy working group for the six-party
talks met at Panmunjom, with North and South Korean representatives
attending. On that occasion, North Korea made the request. North
Korea will ask China to construct the facility, according to the
officials.

North Korea is now in the process of disabling its nuclear-related
facilities. In return, North Korea is to be aided with fuel oil
amounting to 1 million tons. However, the Japanese government does
not take part in this aid, taking the position that there is no
progress on the issue of Japanese abductees. South Korea and other
six-party members are calling on Japan to take part in this aid

TOKYO 00001588 006 OF 011


program at an early date. North Korea is believed to have singled
Japan out in an aim to shake it down.

9) U.S. Under Secretary of State Burns hopes Japan-North Korea talks
will produce results

NIKKEI (Page 2) (Full)
June 11, 2008

Referring to formal Japan-North Korea talks to be held in Beijing,
starting from June 11, visiting Under Secretary of State for
Political Affairs Burns noted, "I hope the talks will produce a
definite result." Regarding the issue of the U.S. delisting North
Korea from its list of state sponsors of terrorism, the issue in the
spotlight, Burns underscored the U.S. stance that it would reach a
final decision, based on its law, depending on progress on North
Korea's nuclear issue.

10) Japan to apply for extending its continental shelf to CLCS with
aim of gaining right to resource exploitation

YOMIURI (Page 2) (Full)
June 11, 2008

The government decided to apply to the United Nations Commission on
the Limits of the Continental Shelf (CLCS) to approve adding 380,000
square meters to Japan's continental shelf. This decision was
revealed by a secretariat staffer at the first session yesterday of
the government's Headquarters for Ocean Policy's demarcation team.

It has been confirmed that there are such ocean floor resources as
methane hydrate, which is drawing attention as an alternative energy
for oil, sea-floor hydrothermal deposit, and manganese nodule in the
sea-floor around Japan. If the CLCS approves Japan's additional
continental shelf, Japan can claim that it has the right to develop
such resources.

Japan will make an application in accordance with the UN Convention
on the Law of the Sea, which took effect in 1994. The convention
states that the sea-floor within 200 nautical miles (approximately
370 kilometers) from each country's shore as its continental shelf
and allows each country to exploit ocean floor resources in that
zone. Furthermore, the convention stipulates that if each country's
territory is scientifically proved to be contiguous to ocean floor,
that country can extend its continental shelf up to 350 nautical
miles (approximately 650 kilometers).

The government has continued a full survey since 2004 and is
scheduled to complete it by the end of this month. As a result of
the survey, the government has judged it can apply for the
Shikoku-Philippine Basin and the eastward area of the Bonin Islands
as additional continental shelves of Japan. Japan will submit a
survey result to the CLCS by next January. The 380,000 square meters
of continental shelf is almost equal to the Japan's land area.

11) Fukuda decides to extend Diet session for short period out of
desire to ensure passage of EPA with ASEAN

TOKYO SHIMBUN (Page 2) (Excerpts)
June 11, 2008

The ruling coalition decided yesterday to extend the current Diet

TOKYO 00001588 007 OF 011


session by six days. The decision stems from Prime Minister Yasuo
Fukuda's strong desire to ensure parliamentary approval for an
economic partnership agreement (EPA) reached between Japan and the
Association of Southeast Asian Nations (ASEAN).

Speaking before reporters at the Kantei last evening, Fukuda
emphasized: "The EPA with ASEAN must be passed somehow. I have asked
for an extension of the session."

After the ruling coalition adopted a bill governing the special tax
revenues for highway construction and maintenance by taking an
override vote in the House of Representatives, both the ruling and
opposition camps agreed in the Lower House on the bills and treaties
that had been sent to the House of Councillors. Given this, the
ruling coalition was optimistic about the situation in the last
phase of the current Diet session.

However, the Democratic Party of Japan (DPJ) insisted that it would
not respond to deliberations unless the government promises to
summon Naoki Akiyama, executive director of the Japan-U.S. Center
for Peace and Cultural Exchange, a Tokyo-based organization, to
appear as a sworn witness in an Upper House's Foreign Affairs and
Defense Committee meeting. But since the ruling coalition rejected
this demand, the planned meeting was not held.

The government and the ruling coalition had no intention to extend
the current Diet session, based on the judgment that an extension
would result in increasing opportunities for the opposition bloc,
which has control of the Upper House, to pursue the government.

But if the session is extended for a short period, the EPA will be
automatically approved on the 21st under the relevant rule in the
Constitution. In a case in which the agreement is scrapped without
an extension of the session, the government will resubmit it to the
extraordinary Diet session to be convened in August. Should the EPA
not be approved by the end of this year as a result of the DPJ's
attempt to prolong deliberations, the effectuation of the agreement
on tariffs with Malaysia and Indonesia will be delayed one year.

12) DPJ to submit censure motion today to play up confrontational
stance, but lack of tension with about-face from cooperative
attitude on bills related to people's livelihood

TOKYO SHIMBUN (Page 2) (Full)
June 11, 2008

The Democratic Party of Japan (DPJ) yesterday made final
preparations to submit a censure motion against Prime Minister
Fukuda to the House of Councillors today. If the motion is adopted,
it will be the first resolution against the prime minister under the
Constitution. Despite such a situation, an atmosphere of tension has
not built up in the main opposition party in part because the
process of handling the bills agreed on in talks with the ruling
coalition has been speedily moving ahead.

The DPJ decided yesterday to leave a decision on what to do about a
censure motion entirely to President Ichiro Ozawa and other
executive members. Secretary General Yukio Hatoyama emphasized in a
street-corner speech in Yurakucho, Tokyo:

"Unless Prime Minister Fukuda promises to abolish the health
insurance system for people aged 75 or older, we would like to

TOKYO 00001588 008 OF 011


submit and adopt a censure motion. This will be the greatest
opportunity for us to change the trend of politics."

DPJ Diet Affairs Committee Chairman Kenji Yamaoka met with his
Liberal Democratic Party counterpart Tadamori Oshima and renewed his
call for his party's agreement on the early abolition of the said
system.

This approach is aimed to create an environment for the DPJ to
submit a censure motion, citing the refusal by the government and
the ruling coalition to scrap the elderly health plan.

In actuality, however, a confrontational mood is not significantly
growing in the DPJ. That is because the ruling and opposition camps
in cooperation are stepping up efforts to enact the bills related to
the people's livelihood in anticipation of a suspension of Diet
deliberations in the case of a censure motion presented, besides the
reason that the motion will certainly not serve to prompt the prime
minister to dissolve the House of Representatives for a snap
election or to resign his cabinet en masse.

In the Diet session today, dozen bills, including a bill to deal
with the leprosy problem, are scheduled to be adopted in an Upper
House plenary session in the morning and then to be submitted in the
afternoon. Since the DPJ will make a sharp turn from the cooperative
stance to a confrontational one, a senior party member defined it as
"a difficult and risky attempt."

For the DPJ, the submission of a censure should have meant to "show
its willingness to fight seriously with the government," according
to another senior member. For now, though, its effect remains
unknown. A party member was overheard saying: "In order to perform
its duty with clear explanations, our party should respond to calls
for party-head talks."

13) Ozawa in confrontational mode, but criticism from within his
party shows that not all are lined up behind him

YOMIURI (Page 4) (Excepts)
June 11, 2008

Democratic Party of Japan (DPJ) President Ichiro Ozawa's reason for
having his party submit to the Upper House of Diet today a censure
motion against the Prime Minister Fukuda is to publicize his
confrontational stance against the Fukuda administration. However,
opposition to this move is still smoldering right down to the wire,
and there are those in the party who point out, like one veteran
lawmaker who said, "Even if we submit the censure motion, there is
no sense of uplift from it."

At a meeting of the DPJ standing secretaries yesterday, from which
Ozawa was absent, being in the regions on a stumping tour, former
DPJ President Seiji Maehara criticized the DPJ's cancellation of a
party-heads debate on the 11th, saying, "We should present our
assertions as a party." Former President Katsuya Okada agreed with
him.

Japanese Communist Party Secretary General Tadayoshi Ichida at a
press conference on the 10th also was critical: "A censure motion
should not filed only under conditions where Lower House dissolution
and a general election, or a cabinet resignation en masse, are
unavoidable." He approved filing a resolution, but would not reject

TOKYO 00001588 009 OF 011


deliberation even if it were rejected.

14) Health care system: Ruling parties finalize improvement
measures, including premium payments by pensioners' children

TOKYO SHIMBUN (Page 1) (Full)
June 11, 2008

The Liberal Democratic Party (LDP) and the New Komeito at a meeting
yesterday of the ruling parties' project team on the public health
insurance plan for elderly people aged 75 or older finalized
measures to improve the system. The government and the ruling
parties will formally adopt them on the 12th at the earliest.

A cut in the per-capita part of the premiums paid by those whose
income from public pensions is less 800,000 yen a year -- 2.7
million persons -- will be reduced from the current 70 PERCENT to
90 PERCENT . Premiums imposed in accordance with income levels will
be reduced about 50 PERCENT for 900,000 persons who are exempt from
local taxes with their public pension income between over 1.53
million yen and about 2.1 million yen.

However, since it is not possible to reform the system to allow a 90
PERCENT reduction in relation to the per-capita part of the
premiums in time, a transitional measure will be taken this fiscal
year. Under the transitional system, no premiums will be imposed for
six months starting in October on those whose public pension income
is less than 1.68 million yen and are eligible for a 70 PERCENT cut
in relation to the per-capita part of the premiums, making their
annual reduction rate 85 PERCENT . There are 4.7 million such
pensioners.

The current pension deduction system will be maintained, instead of
an option system between such a system and an over-the-counter
premium payment system being employed. As an alternative measure,
credit transfers will be allowed for those who have no records of
the failure of the payments of national health insurance premiums.
Premiums of those whose income from public pensions is less than 1.8
million yen can be deducted from the bank account of kin, such as
children or a spouse.

Regarding consultation fees for the terminal care of elderly
patients aged 75 or older, medical fees to be reimbursed to
hospitals under the medical insurance system in the event a doctor
or nurses documented their terminal care policy, a necessary step
will be taken, based on discussion by the Central Social Insurance
Medical Council. Such a step could include a freeze on the fees.

15) DPJ to forgo taking vote on Ikeo appointment in Upper House; BOJ
Policy Board seat likely to remain vacant

NIKKEI (Page 5) (Excerpts)
June 11, 2008

The major opposition Democratic Party of Japan began yesterday
undertaking final coordination to forgo taking a House of
Councillors vote in the current Diet session on a plan to appoint
Keio University Professor Kazuhito Ikeo as a member of the Bank of
Japan Policy Board. The reason is that the party is being pressed
for a shift in its decision to endorse the Ikeo plan by the People's
New Party, which forms a joint parliamentary group in the Upper
House. As a result, the Policy Board seat might be forced to remain

TOKYO 00001588 010 OF 011


vacant a while longer.

The DPJ had decided to endorse the appointment of Ikeo, but the PNP,
which reversed its previous stance, demanded that the largest
opposition party, too, withdraw its policy course by brandishing a
threat of dissolution of the joint parliamentary group, saying that
Ikeo promoted postal privatization. The DPJ decided at its executive
meeting yesterday to call off the party's decision and to reconsider
the matter by leaving it to the party leadership.

The party has already decided to submit a censure motion against
Prime Minister Yasuo Fukuda to the Upper House. The DPJ has also
made it clear that if the motion is adopted by the Upper House, it
will boycott Diet deliberations if the prime minister ignores it.
Given the situation, the DPJ has decided that taking a vote on the
Ikeo appointment plan in the Upper House during the ongoing Diet
session is difficult.

16) Basic policy guidelines determined in outline; Prime minister to
uphold spending reform without treating social security as
sacrosanct

MAINICHI (Page 2) (Abridged slightly)
June 11, 2008

The government's Council on Economic and Fiscal Policy (CEFP),
chaired by Prime Minister Yasuo Fukuda, yesterday adopted an outline
showing priority policies for the 2008 basic economic and fiscal
policy guidelines to be drafted later this month. The outline,
clearly reflect Fukuda's political identity, aims at freeing up
road-related tax revenues for general purposes, as well as turning
Japan into a low-carbon society and making it into a leader in the
fight against global warming. The outline consists of six items,
such as strengthening the economy's growth potential; promoting
administrative and fiscal reforms (moving road-related revenues into
the general account, carrying out a reform of revenues and
expenditures, as well as a fundamental reform of the taxation
system); creating a reliable social security system; and turning
Japan into a low-carbon society.

The CEFP discussed the target of curbing the growth of social
security spending to 1.1 trillion yen, specified in the 2006 basic
policy guidelines. The prime minister indicated that he would uphold
the framework of reforming the nation's spending, saying, "We will
not regard social security as a sacred area." In view of public
criticism of the healthcare system for the elderly and possible
Lower House dissolution, calls are growing in the government and
ruling parties for a withdrawal or a review of the target of curbing
the nation's social security spending.

CEFP private-sector members presented a projection that the
government would be able to reduce medical spending by a total of
1.44 trillion yen in the three years up to 2011. As specific
measures, they pointed out increasing the rate of use of generic
drugs to 40 PERCENT on a par with Western levels (880 billion yen);
shortening the period of hospitalization for examination, and the
elimination of redundant examinations (410 billion yen); and
integration or abolition of public hospitals and reduction of
personnel costs (150 billion yen). Health, Labor and Welfare
Minister Yoichi Masuzoe already has said that the projection was not
pragmatic, so coordination might run into snags.


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SCHIEFFER

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