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Cablegate: Japanese Morning Press Highlights 06/16/08

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TAGS: OIIP KMDR KPAO PGOV PINR ECON ELAB JA

SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 06/16/08

Index:

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

Opinion polls:
4) Mainichi poll: Fukuda Cabinet support rate up slightly to 21
PERCENT ; Non-support rate down a point to 60 PERCENT ; Majority of
Japanese oppose removing sanctions on DPRK (Mainichi)
5) Mainichi poll: 47 PERCENT approve, 43 PERCENT disapprove of
Democratic Party of Japan's (DPJ) aggressive stance toward LDP
(Mainichi)
6) Kyodo poll: Cabinet support rate rises 5.2 points to 25 PERCENT ,
with non-support rate down 6.4 points to 60.2 PERCENT (Tokyo
Shimbun)
7) Jiji poll: Cabinet support rate slips a bit to 19.1 PERCENT ,
with non-support rate also down a point to 61.8 PERCENT (Tokyo
Shimbun)

North Korea problem:
8) Japan reports that North Korea has agreed to reopen investigation
of abductees, and will also cooperate to return the JAL hijackers
(Nikkei)
9) Japan will be involved in North Korea's reinvestigation of
abduction issue (Yomiuri)
10) Prime Minister Fukuda: Japan would ease sanctions further if
more progress on the abduction front (Tokyo Shimbun)
11) DPJ Secretary General Hatoyama against easing sanctions against
the DPRJ without good cause (Tokyo Shimbun)

12) U.S. welcomes DPRK's intent to reopen abduction issue, stresses
cooperation with Japan (Nikkei)
13) Mood growing now for restarting the Six-Party Talks (Nikkei)

14) LDP, New Komeito secretaries general: Japan would resume
sanctions on North Korea if investigation does not pan out (Sankei)


15) Foreign ministers of Japan, U.S., and ROK agree to summit
meeting in Sept. (Yomiuri)

16) Taiwan to recall its representative in Tokyo in protest of
Japan's response to Senkaku accident in which JCG sunk a small
fishing vessel (Mainichi)

G-8 finance ministers meeting:
17) G-8 finance ministers all want a strong dollar but no consensus
on when the U.S. economy might recover (Nikkei)
18) G-8 finance ministers stress cooperation to fight inflation
(Yomiuri)
19) Finance ministers of U.S., Japan, Britain agree to setting up
$10 billion environment fund for developing countries (Nikkei)

20) G-8 science ministers, also meeting in Japan, to promote joint
use of research facilities to develop technology to resolve global
warming problem (Yomiuri)

21) Senior U.S. official in Washington stresses concern about state
of Japanese politics in the lopsided Diet (Sankei)

22) Japan and China agree to joint development of the Shirakaba gas

TOKYO 00001628 002 OF 015


field in the E. China Sea (Nikkei)

Articles:

1) TOP HEADLINES

Asahi, Mainichi, Yomiuri, Sankei, Tokyo Shimbun & Akahata:
Iwate-Miyagi earthquake leaves 9 dead, 13 missing; Three bodies
discovered in collapsed inn

Nikkei:
Survey of 100 corporate presidents: 30 PERCENT say business
conditions worsening, exceeding those who say business is expanding

2) EDITORIALS

Asahi:
(1) Hansen's disease basic law will help not to isolate patients
(2) Prime Minister Rudd visits Hiroshima with aim of eliminating all
nuclear weapons

Mainichi:
(1) Global inflation cannot be stopped by lip service
(2) Tobacco and health: We support raising the price of a pack of
cigarettes to 1,000 yen

Yomiuri:
(1) Agency for regional revitalization should be set up swiftly to
deal with reconstruction of third-sector companies
(2) Opening of Tokyo Metro Fukutoshin Line: Safety and reliability
highest priority

Nikkei:
(1) Chinese economy faces three difficulties - rising commodities
prices, reconstruction after earthquake, falling shares
(2) Can consumer agency function properly?

Sankei:
(1) Social welfare panel's report: Future costs of social welfare
should be shown quickly
(2) China-Taiwan talks held; Next step for Taiwan to make its
international "debut"

Tokyo Shimbun:
(1) COP10 should serve to protect human beings

Akahata:
(1) Resolution for indigenous people should be used to drastically
rectify Ainu policy

3) Prime Minister's Official Residence (Kantei)

Prime Minister's schedule, June 13

NIKKEI (Page 2) (Full)
June 14, 2008

08:31
Attended a Security Council of Japan meeting.

09:00
Attended a cabinet meeting.

TOKYO 00001628 003 OF 015

09:35
Met Miss Iris Yamauchi and others at the Kantei in the presence of
Finance Minister Nukaga. Afterward met Asian Development Bank
President Kuroda.

11:10
Attended a consumer administration promotion conference. Afterward
met State Minister in Charge of Consumer Affairs Kishida.

12:15
Met Climate and Energy Minister Hedegaard of Denmark at the Hotel
New Otani, followed by former British Foreign Minister Beckett.
Afterward attended the 2008 global environment symposium sponsored
by the Asahi Shimbun.

14:33
Met at the Kantei U.S.-Japan Conference on Cultural and Educational
Exchange adviser Minoru Makihara, Shinsei Bank President Tierry
Porte in the presence of U.S. Ambassador to Japan Schieffer and
others.

14:58
Met Foreign Minister Koumura, Vice-Foreign Minister Yabunaka, Asian
and Oceanian Affairs Bureau Director-General Saiki in the presence
of Chief Cabinet Secretary Machimura, Deputy Chief Cabinet Secretary
Futahashi and advisor Nakayama.

15:41
Met Takeshi Noda and other Lower House lawmakers of the LDP
anti-global warming headquarters.

16:01
Met Cabinet Intelligence Director-General Mitani, followed by LDP
Election Strategy Council Chairman Koga and his deputy Suga.
Afterward met MHLW Minister Masuzoe.

17:17
Met Internal Affairs and Communications Minister Masuda and
Assistant Chief Cabinet Secretary Saka.

17:37
Met drug abuse prevention campaign character Konno and others.

19:20
Returned to his official residence.

Prime Minister's schedule, June 14

NIKKEI (Page 2) (Full)
June 15, 2008

10:10
Deputy Chief Cabinet Secretary for Crisis Management Ito.

13:00
Attended an Iwate-Miyagi Inland Earthquake meeting at the Kantei
Crisis Management Center.

13:20
Met Deputy Foreign Minister Kohno, Economic Affairs Bureau
Director-General Otabe, Assistant Chief Cabinet Secretary Ando,

TOKYO 00001628 004 OF 015


Resources and Energy Agency Director General Mochizuki, MOF
International Cooperation Bureau chief Bessho, Finance Ministry
International Bureau chief Tamaki and others.

15:10
Met Ito, followed by Chinese Foreign Minister Yang Jiechi and South
Korean Foreign Minister Yu Myung Hwan in the presence of Foreign
Minister Koumura and Asian and Oceanian Affairs Bureau chief Saiki.

16:10
Met Ito.

17:42
Met Fiscal and Economic Policy Minister Ota.

18:32
Talked with Disaster Minister Izumi on the phone at the Crisis
Management Center.

19:00
Met Ota.

Prime Minister's schedule, June 15

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

10:16
Met Deputy Chief Cabinet Secretary for Crisis Management Ito and
Meteorological Agency Director General Hiraki.

13:03
Met Disaster Minister Izumi and Cabinet Director General for Policy
Planning Kato.

17:28
Met Land, Infrastructure, and Transport Minister Fuyushiba.

4) Poll: 55 PERCENT disapprove lifting sanctions on N. Korea;
Cabinet support up slightly to 21 PERCENT

MAINICHI (Page 1) (Abridged)
June 16, 2008

The Mainichi Shimbun conducted a telephone-based nationwide public
opinion survey on June 14-15, in which only 34 PERCENT answered
"yes" while 55 PERCENT said "no" when respondents were asked if
they appreciated the government's decision to lift some of its
sanctions on North Korea in response to North Korea's agreement in
the recent bilateral talks to look again into the issue of Japanese
nationals abducted to North Korea. The rate of public support for
Prime Minister Fukuda and his cabinet rose 3 percentage points from
the last survey in May to 21 PERCENT , with the nonsupport rate down
1 point to 60 PERCENT . The Fukuda cabinet's support rate rose for
the first time since it came into office in September last year.
Yet, it still remains low.

North Korea has also agreed to turn over Japan Airlines hijackers.
However, the survey shows that the general public is cautious about
lifting sanctions without seeing what North Korea will now do.

In the breakdown of public support for political parties, the ruling

TOKYO 00001628 005 OF 015


Liberal Democratic Party stood at 21 PERCENT , up 1 point from the
last survey. The leading opposition Democratic Party of Japan
(Minshuto) was at 25 PERCENT , down 3 points.

5) Poll: 47 PERCENT support DPJ's confrontational stand against
Fukuda

MAINICHI (Page 1) (Full)
June 16, 2008

The Diet has now wound up a battle of words between the ruling and
opposition parties in its current ordinary session, with the House
of Councillors adopting a censure motion against Prime Minister
Yasuo Fukuda on June 11. The Mainichi Shimbun, in its recent public
opinion survey, asked respondents about the Diet's divided situation
in which the ruling camp holding a majority of the seats in its
lower chamber while the opposition camp controlling its upper
chamber.

In the survey, respondents were asked if they appreciated the
leading opposition Democratic Party of Japan (Minshuto) that took a
confrontational stand against the governing parties. To this
question, 47 PERCENT answered "yes," with 43 PERCENT saying "no."
In the last survey taken in May, "yes" accounted for 41 PERCENT ,
with "no" at 51 PERCENT . The survey this time shows that the DPJ's
strategy has gained more public understanding.

Facing the censure motion, the prime minister will not dissolve the
House of Representatives and his cabinet will not resign en masse.
Those who approved this course accounted for only 29 PERCENT , with
those who disapproving totaling 61 PERCENT .

6) Poll: Cabinet support up to 25 PERCENT

TOKYO SHIMBUN (Page 1) (Full)
June 14, 2008

In the wake of the House of Councillors' passage of a censure motion
against Prime Minister Yasuo Fukuda, Kyodo News conducted a
telephone-based spot nationwide public opinion survey on June 12-13.
The Fukuda cabinet's support rate was 25.0 PERCENT , up 5.2
percentage points from its all-time low.

This can be taken as reflecting the public's appreciation to a
certain extent of Fukuda, who told his ruling Liberal Democratic
Party and its coalition partner, New Komeito, to agree with the
leading opposition Democratic Party of Japan (Minshuto) to retouch a
bill reforming the national civil service personnel system. As a
result, the legislation passed through the Diet. In the breakdown of
public support for political parties, the LDP rose 4.8 points to
29.1 PERCENT , with the DPJ dropping 6.7 points to 23.6 PERCENT .
The LDP outstripped the DPJ for the first time in a month.

The Fukuda cabinet's nonsupport rate was 60.2 PERCENT , showing a
decrease of 6.4 points. However, it still remains high. Fukuda is
still facing difficulties in steering his government. In the
breakdown of reasons for not supporting the Fukuda cabinet, 28.7
PERCENT said the prime minister lacks leadership ability, topping
all other answers. The most common reason given for supporting the
Fukuda cabinet was that there is no other appropriate person,
accounting for 47.1 PERCENT . Among other reasons for supporting
Fukuda, 20.4 PERCENT said the prime minister was trustworthy,

TOKYO 00001628 006 OF 015


showing a slight increase.

The Diet has now censured Fukuda in its upper chamber, and the DPJ
is poised to continue its refusal of deliberations in the Diet
during its extraordinary session that is expected to be called in
August. In the survey, 68.6 PERCENT answered said "no" and 17.3
PERCENT said "yes" when respondents were asked if they would
support the DPJ's strategy of boycotting Diet deliberations.

Respondents were also asked what they thought the prime minister
should do. In response to this question, 56.2 PERCENT said the
prime minister should dissolve the House of Representatives for a
general election, with 30.0 PERCENT saying the prime minister does
not have to resign because the censure motion is not legally binding
and 8.4 PERCENT saying his cabinet should resign en masse.
Respondents were further asked whey they would like an election to
be held for the House of Representatives. To this question, 22.0
PERCENT answered that they would like it to take place by this
summer, with 36.4 PERCENT preferring to "this fall or later this
year." A total of nearly 60 PERCENT , as in the last survey, want an
election to take place within the year.

Meanwhile, public opinion was split over the now-introduced
controversial new healthcare system for the elderly, with 47.0
PERCENT insisting that it should be abolished and 44.9 PERCENT
saying they think it is all right to maintain the new system if it
is improved.

7) Poll: Cabinet support down to 19.1 PERCENT

TOKHYO SHIMBUN (Page 2) (Abridged)
June 16, 2008

The rate of public support for Prime Minister Yasuo Fukuda's cabinet
dropped 0.8 percentage points from last month to 19.1 PERCENT in a
public opinion survey conducted by Jiji Press on June 6-9. The
Fukuda cabinet's support rate reached a new low in the Jiji poll
since its inauguration. The nonsupport rate was 61.8 PERCENT , down
1.0 points. It decreased for the first time but still topped 60
PERCENT for the second month in a row. This can be taken as
reflecting public attitudes critical of (a scandal involving)
government bureaucrats treated by taxicab drivers in money or in
kind on their way home late at night, as well as a public backlash
against the controversial new healthcare system for the elderly.

In the breakdown of public support for political parties, the ruling
Liberal Democratic Party stood at 20.3 PERCENT , up 0.8 points. The
LDP topped 20 PERCENT for the first time in two months. Meanwhile,
the leading opposition Democratic Party of Japan (Minshuto) dropped
1.3 points to 14.5 PERCENT . The difference of public approval
ratings for the LDP and the DPJ expanded to 5.8 PERCENT .

The survey was conducted across the nation on a face-to-face basis
with a total of 2,000 persons chosen from among men and women aged
20 and over. The response rate was 66.4 PERCENT .

8) DPRK vows to reinvestigate abductees, send hijackers back to
Japan

NIKKEI (Top play) (Excerpts)
June 14, 2008


TOKYO 00001628 007 OF 015


The government on June 13 declared that during the latest formal
working-level talks between Japan and North Korea in Beijing, the
North Korean side altered its previous assertion that the issue of
abductions of Japanese citizens has already been settled, and that
it promised to reinvestigate Japanese abductees whose whereabouts
had been unknown. The North Korean side also indicated that it would
cooperate and hand six JAL hijackers and related persons suspected
of having been involved in abductions of Japanese citizens back to
Japan. Tokyo intends to lift a portion of its independent economic
sanctions imposed on North Korea, which began in October 2006, once
both sides reach an agreement on methods for reinvestigations and
other matters.

Late on June 13, when asked about the results of the recent
Japan-North Korea talks at the Kantei, Prime Minister Yasuo Fukuda
said: "North Korea appeared willing to have talks with us. If that
is the case, it may be safe to say that we have now come to the
entrance of the negotiating process." Chief Cabinet Secretary
Nobutaka Machimura told the press: "They have turned around their
previous stance that the abduction issue had been settled already.
We view this as a degree of progress on the issue."

The working-level talks were held on June 11 and 12 between the
Japanese representative, Akitaka Saiki, director-general of the
Ministry of Foreign Affairs' Asian and Oceanian Affairs Bureau, and
his North Korean counterpart, Song Il Ho, ambassador for diplomatic
normalization talks with Japan. On the 13th, Saiki briefed Fukuda,
Machimura, and Foreign Minister Masahiko Koumura on the results of
the talks. The government announced the results of the talks through
a press briefing by Machimura. The government also explained the
results to family members of the abductees.

On the question of abductions of Japanese citizens by North Korea,
the North Korean side vowed to reinvestigate abductees in view of
taking specific action to resolve the issue. As for how the
reinvestigation should be conducted, the Japanese side asserted that
the investigation needs to discover survivors and lead to having
them return home. The North Korean side did not reject this
assertion by Japan. Machimura noted: "Our understanding is that the
other side has accepted (the Japanese side's assertion)."

Major points of Japan-North Korea talks

Q North Korea has promised to reinvestigate the abduction issue. The
Japanese side welcomed this stance, as the North Koreans altered
their previous position.

Q North Korea declared that it would cooperate to resolve the JAL
hijacking incident. Coordination will start between the two
countries to send the hijackers back to Japan.

Q Once agreement is reached on how to reinvestigate abductees,
Japan will lift restrictions on personal travel between Japan and
North Korea and North Korean chartered planes' flights into Japan.

Q Japan will remove a ban on North Korean ships' entering Japanese
ports only if they load relief goods for humanitarian purposes in
Japan. But Japan will not allow people to embark or disembark.

Q Japan does not take the progress at present as sufficient for
taking part in economic and energy assistance agreed on in the
six-party talks on the North Korean nuclear issue.

TOKYO 00001628 008 OF 015

9) LDP secretary general: Japan will be involved in reinvestigation
into abductees

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

The ruling Liberal Democratic Party's (LDP) Secretary General Ibuki
appeared on an NHK TV talk show yesterday. When asked about a
reinvestigation into Japanese abductees declared by North Korea
during the latest working-level talks between Japan and North Korea,
Ibuki indicated that the Japanese side would be involved in the
reinvestigation, noting, "It will not be done one-sidedly by North
Korea. They will consult with Japan and confirm items for
reinvestigation and identify abductees." Ibuki went on to say: "We
can't remove the sanctions (now imposed on North Korea) if we do not
satisfy the details of the reinvestigation. Even after we remove the
sanctions, if the way the investigation is carried out is different,
the sanctions will be imposed again. Prime Minister Fukuda is
strongly aware of this point."

10) Prime Minister Fukuda: Sanctions would be eased further if
improvement in reinvestigation on abductees seen

TOKYO SHIMBUN (Page 3) (Full)
June 14, 2008

When asked by the press corps on June 13 at his office about North
Korea having promised Japan to conduct again its investigations on
the Japanese abductees by its agents, Prime Minister Yasuo Fukuda
indicated that Tokyo would ease further its sanctions against
Pyongyang depending on the development of the reinvestigation.
Fukuda stated: "If there is any improvement in the investigation, we
will ease the economic sanctions further."

Fukuda gave a certain level of positive evaluation to the result of
the recent Japan-North Korea talks, saying: "The question is the
contents of the reinvestigation. We will boil them down. I think we
are now at the start of the negotiating process."

He explained the reason for his decision to lift part of the
economic sanction measures (against the North) this way:

"Obviously, North Korea expects something in return. Since we cannot
hold negotiations (with that country) without such, I have decided
it would be good to ease the sanctions in an extremely limited
manner."

11) DPJ's Hatoyama: Sanctions should not be easily lifted

TOKYO SHIMBUN (Page 3) (Full)
June 14, 2008

Democratic Party of Japan (DPJ) Secretary General Yukio Hatoyama on
June 13 criticized the government decision to ease part of its
sanction measures against North Korea. He said: "Unless there is any
concrete improvement (in the issue of North Korea's kidnapping of
Japanese nationals), the government should not easily lift the
sanctions." He was responding to questions by the press. He also
stated: "Is it an improvement that North Korea cannot say the
abduction issues has been resolved? The public will be totally
unconvinced."

TOKYO 00001628 009 OF 015

Meanwhile, Japanese Communist Party Head of the Secretariat
Tadayoshi Ichida released a statement that wrote: "It is a step
forward for resolving the Japan-North Korea problems."

12) North Korea's planned reinvestigation into abduction issue: U.S.
spokesman welcomes sincere steps by North Korea, emphasizing
cooperation between U.S. and Japan

NIKKEI (Page 2) (Full)
Evening, June 14, 2008

A U.S. State Department spokesman commented on June 13 on the fact
that North Korea has promised to launch a reinvestigation into the
question of Japanese nationals abducted to the North: "We will
welcome any sincere steps to be taken by North Korea." At the same
time, he indicated that the U.S. government's efforts have paid off,
saying: "The United States has long urged North Korea to address
Japan's concern over the abduction issue."

As the next step, the United States intends to accelerate
coordination for progress in the six-party talks on the North Korean
nuclear issue.

U.S. State Department spokesman Vasquez indicated that Washington
and Tokyo had worked closely for Japan-DPRK talks, saying, "We were
informed of the contents of the talks by the Japanese government in
advance."

13) Mood growing for resumption of six-party talks

NIKKEI (Page 3) (Slightly abridged)
June 14, 2008

(Hiroshi Maruya, Washington)

The U.S. government has welcomed the recent progress in Japan-North
Korea talks. The Bush administration is eager to hold a six-party
foreign ministerial after estimating how and when the second stage
of North Korea's denuclearization will be completed. It is aiming to
resume the six-party talks by the end of June and hold a foreign
ministerial in July. Upon ascertaining what responses North Korea
will make to the issue of the past abductions of Japanese nationals
by its agents and to its pledge to declare all its nuclear programs,
the U.S. intends to decide to delist North Korea as a state sponsor
of terrorism.

In the talks held so far between the U.S. and North Korea, U.S.
Assistant Secretary of State Christopher Hill, the top U.S. nuclear
negotiator, urged the North to take action to resolve the abduction
issue. Consideration to Japan, an ally of the U.S., is imperative
for State Secretary Condoleezza Rice and Hill, both of whom give
priority to a policy of dialogue in dealing with Pyongyang, to
persuade the hardliners in the U.S., who are critical of their
policy. In order also for the U.S. to draw Japan into the framework
of aid to the North in return for its submission of a nuclear
declaration and to reduce its burden, an improvement in Japan-North
Korea relations is imperative for the U.S.

North Korea has agreed to hand over Japanese radicals who hijacked a
Japan Airlines plane and took it to North Korea. This development
and the North's earlier antiterrorism statement will make it easier

TOKYO 00001628 010 OF 015


for the U.S. to be ready to drop North Korea from the U.S. terrorism
blacklist.

If North Korea disables the reactor at its nuclear complex in
Yongbyon and declares all its nuclear programs, and if the U.S.
delists the North, the second stage will be almost completed. The
denuclearization process will then enter the final stage.

The Bush administration is now preoccupied with Iraq policy, prior
to the expiration of its term of office next January. If things move
smoothly as envisioned, such progress will be one of its few
diplomatic achievements. The administration is aiming to hold a
foreign ministerial to coincide with a planned visit to Asia by
Secretary Rice after the six-party talks resume. The U.S. is looking
to time it with the Association of Southeast Asian Nations (ASEAN)
Regional Forum (ARF) to be held in Singapore in late July.

Even so, it is still uncertain whether North Korea will include the
number of nuclear weapons it possesses in declaring its nuclear
programs. Negotiations may not proceed smoothly.

14) Secretaries general of LDP, New Komeito: Revival of sanctions
possible, depending on North Korea's response

SANKEI (Page 5) (Full)
June 16, 2008

Appearing on an NHK program yesterday, Liberal Democratic Party
(LDP) Secretary General Bunmei Ibuki stated:

"We won't be able to lift the sanctions (against North Korea) unless
we satisfy the contents (of the reinvestigation). If the North does
not keep its promise after we lift part of the economic sanction
measures, we will reinstate the sanctions."

Ibuki showed the perception that Japan would reinstate its sanctions
depending on North Korea's response.

Appearing on the same NHK program, New Komeito Secretary General
Kazuo Kitagawa said:

"We have to gauge the contents of the reinvestigation on the
abductees (which North Korea promised). If Pyongyang does half-back
response, we will reinstate the sanctions. We will naturally take
tough measures."

Ibuki also stated on a Fuji TV program yesterday: "Unless the
reinvestigation on the abductees is conducted as Japan expects,
there is no need to (lift the sanctions). I think Prime Minister
Yasuo Fukuda understands it well."

Democratic Party of Japan (DPJ) Secretary General Yukio Hatoyama,
however, criticized the government's response, saying: "It is too
early to ease the sanctions before North Korea shows specific
response."

15) Japan, China, South Korea foreign ministers agree to hold
trilateral summit in September, strengthen anti-disaster
cooperation

YOMIURI (Page 2) (Full)
June 15, 2008

TOKYO 00001628 011 OF 015

The foreign ministers of Japan, China and South Korea held talks on
June 14 at the Foreign Ministry's Iikura Guesthouse in Tokyo's
Azabudai. As a result, they decided to hold a trilateral summit by
September in Tokyo. In the past, trilateral summits have been held
on the sidelines of ASEAN forums and other events. The upcoming
trilateral summit will be held for the first time independently from
international conferences. An agreement was also reached to hold a
trilateral foreign ministerial regularly rotating the location among
the three countries. The next foreign ministerial will be held in
China.

The meeting was held for about two hours among Japan's Foreign
Minister Masahiko Koumura, China's Yang Jiechi, and South Korea's Yu
Myung Hwan. The three foreign ministers decided to carry out
coordination to ensure that the North Korean issue, climate change
and other matters would be high on the agenda of the upcoming
trilateral summit.

Koumura said about the six-party talks on the North Korea nuclear
issue: "We would like to obtain the understanding of China and South
Korea so that the questions of denuclearizing North Korea and of
Japan-DPRK relations, including the abduction issue, will move
forward." In response, Yang and Yu agreed to enhance ties among the
three countries, saying, "Cooperation among Japan, China and South
Korea is vital." The three ministers also agreed to promote
anti-disaster cooperation in order to be able to respond speedily to
major disasters, such as the recent Sichuan earthquake.

As for climate change, a major topic in the upcoming July Lake Toya
Summit meeting, the three countries agreed to combine efforts for
drafting a new framework replacing the Kyoto Protocol in 2013 and
beyond. They also decided to hold policy talks in Japan in the fall
to closely cooperate in providing aid to Africa.

16) Taiwan to recall envoy to Japan in reaction to Japan's response
to Senkaku accident

MAINICHI (Page 2) (Abridged slightly)
June 15, 2008

A Taiwanese fishing boat sank on June 10 after colliding with a
Japan Coast Guard patrol boat in Japanese territorial waters near
the Senkaku Islands, known as Tiaoyutai in Taiwan, in the city of
Ishigaki, Okinawa Prefecture. The Taiwanese foreign affairs
department (Foreign Ministry) announced on June 14 that it would
recall representative Koh Se-kai of the Taipei Economic and Cultural
Representative Office in Japan, a point of contact with Japan,
saying that Japan's response as unacceptable. Criticism has been
growing in Taiwan against Japan since the accident.

One June 14, the 11th Regional Japan Coast Guard Headquarters in
Naha City sent to the Naha District Public Prosecutors Office
Ishigaki branch office papers on the captains of the JCG patrol boat
and the Taiwanese fishing boat on suspicion of professional
negligence.

Taiwanese Foreign Minister Francisco Ou in a press conference said:
"It was outrageous that the (JCG) patrol boat sank the small
Taiwanese fishing boat. We demand an apology and the (JCG patrol
boat) captain pay compensation for the inhumane act." Ou also
announced a plan to abolish a special committee, established in

TOKYO 00001628 012 OF 015


October 2005 in the Foreign Ministry to handle Japan affairs with
the aim of strengthening ties to Japan.

Over the accident, Executive Yuan President (Premier) Lio Chao-hsuan
said on June 13: "I will not rule out opening hostilities as the
last resort." With some considering dispatching warships, Taiwan is
stepping up its hard-line stance toward Japan.

17) G-8 finance ministers share need for a "strong dollar"

NIKKEI (Page 1) (Full)
June 15, 2008

In the Group of Eight (G-8) Finance Ministers' Meeting held in Osaka
yesterday, the ministers essentially approved of the U.S. policy of
propping up its currency. U.S. Treasury Secretary Henry Paulson Jr.
stressed that a "strong dollar" was imperative to stabilize the
global economy. No other voiced opposition to Paulson's view. After
the meeting, Paulson issued a statement noting: "I recognize that
the recent steep rise in oil prices is becoming a major risk that
could prolong the U.S. economic slump." He had earlier said that the
U.S. economy would be on a recovery path in the middle of the year,
but he indicated in the statement that the recovery might be delayed
to the end of the year.

A senior Japanese Finance Ministry official quoted Paulson as
saying: "The U.S. economy has great long-term growth potential. If
solid fundamentals in the U.S. economy are reflected, our currency
will naturally become stronger."

In a press briefing held after the meeting, Finance Minister
Fukushiro Nukaga indicated that the joint statement issued at the
meeting in April of the Group of Seven (G-7) finance ministers and
central bank governors, which clearly expressed apprehension about
the slumping U.S. dollar, is still effective, emphasizing the need
for propping up the dollar. Nukaga said: "What was agreed on in the
G-7 meeting remains effective even now." French Finance Minister
Christine Lagarde also said: "I don't feel there is anything strange
about that."

The G-7 statement in April noted: "Key currencies sometimes undergo
a rapid change. We are worried that such changes might negatively
affect our economies and monetary markets." It was the first time in
seven years and seven months that a statement was designed to
constrain sharp changes in key currencies. This highlighted their
concern about the weak dollar.

The G-8 finance ministers find it difficult to refer to currency
issues in a joint statement without central bank governors present.
Given this, they aimed to show to market players that they share the
same position over the weak dollar.

Paulson also referred in the statement after the meeting to the risk
of higher oil prices dealing a blow to the U.S. economy, saying:
"The U.S. economy is still facing a trial." He added: "I expect that
the growth path of the U.S. economy will become faster than the
current path before the end of the year."

18) G-8 finance ministers vow to cooperate in addressing inflation:
Seek transparency in crude oil prices

YOMIURI (Page 1) (Abridged slightly)

TOKYO 00001628 013 OF 015


June 14, 2008

The Group of Eight Nations (G-8) finance ministerial, which has been
held in Osaka, closed on the afternoon of June 14, after adopting a
joint statement. The meeting participants in the joint statement
expressed concern that the steep rise in prices of crude oil and
food could increase inflationary pressure worldwide and vowed to
deal with the issue in cooperation.

Concerning the steep rise in crude oil prices, the joint statement
calls for efforts to constrain demand for oil through the
dissemination of energy-saving technologies and improve the
transparency of the crude oil price formation process through such
means as promoted disclosure of stockpiling information.

One cause contributing to the steep rise in crude oil prices is
speculative funds, which have nothing to do with actual supply and
demand of oil. The participants agreed to pay attention to the
movements of speculative funds.

The meeting also focused on the currency exchange issue with
participants in stressing in unison the importance of stabilizing
exchange rates in order to prevent the dollars from quickly losing
value. This is out of the concern that if the weak-dollar trend
continues, inflation in the U.S. would become serious, having an
adverse impact on the global economy. In addition, it would trigger
the influx of funds into the crude oil market, further raising its
prices.

The statement also calls on various countries, including the G-8
Nations, to make more efforts to boost food production so as to
contain the sharp rise in food prices. It also points out that grain
export restrictions are one factor contributing to soaring grain
prices.

The participants agreed to set up a climate investment fund to help
developing countries take measures to prevent global warming.

19) Environment fund to help developing countries; Japan, U.S.,
Britain aim to raise up to 10 billion dollars, calling on emerging
countries to take part

NIKKEI (Page 3) (Full)
June 14, 2008

Japan, the U.S., Britain and the World Bank on June 13 revealed
their policy of seeking contributions from emerging countries as
well as industrialized countries, such as the G-8 Nations, to a
climate investment fund to be established as early as this summer.
The fund is designed to help developing countries address global
warming. The three lead donors and the World Bank aim to raise up to
10 billion dollars, assuming the participation of China and India as
well.

The finance ministers of Japan, the U.S. and Britain, and the World
Bank Group president on the 13th held a joint press briefing prior
to the G-8 finance ministerial. Finance Minister Nukaga said, "I
want to call on as many countries as possible to take part though
the finance ministerial and the Lake Toya Summit." The U.S. treasury
secretary noted: "I hope we can raise up to 10 billion dollars. We
will be able to gain assistance from emerging countries with large
economies."

TOKYO 00001628 014 OF 015

The World Bank will manage and control the funds, proposed by Japan,
the U.S. and Britain, in providing funds and loans to developing
countries. Japan will donate up to 1.2 billion dollars. Whether
emerging countries will respond to the call is unclear.

20) G-8 science and technology ministers vow to promote joint use of
research facilities for technological development in addressing
global warming

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

The first-ever G-8 science and technology ministerial was held on
June 15 in Nago City, Okinawa. Participants agreed to large-scale
research facilities so as to promote international cooperation in
developing innovative technologies aimed at addressing the gradual
global-scale climate change.

State Minister for Science and Technology Kishida finalized the
chairman's summary and released it at a press conference after the
meeting.

Regarding an approach to settling the global-scale environmental
issue, the participants were in unison in emphasizing the importance
of developing such innovative technologies as next-generation
technology, fusion energy and carbon dioxide capture and storage,
which will lead to a drastic cut in greenhouse gas emissions. The
chairman's paper also noted that the G-8 nations and guest countries
will promote international cooperation on the joint use of
large-size facilities as well as to share information, setting up a
new framework for a working-group meeting.

21) Senior U.S. official expresses concern about Japan's lopsided
Diet

SANKEI (Page 7) (Full)
June 16, 2008

In a U.S. Congressional hearing on June 12, a senior U.S. official
described Japan's divided Diet situation as "sailing in uncharted
waters." The situation referred to is the ruling camp controlling
the House of Representative, and the opposition camp in control of
the House of Representatives. The official expressed concern about
Japan's divided Diet as having delayed deliberations on bills and
political decisions. The official stated that the pessimistic view
is that the current unstable political situation in Japan would
continue for several years. The official nonetheless expressed hope
that Japan would play a leading role in the Group of Eight summit in
July in Hokkaido.

Deputy Assistant Secretary of State for East Asian and Pacific
Affairs Alexander Arvizu made the statement before a hearing of the
Subcommittee on Asia, the Pacific, and the Global Environment of the
House Foreign Affairs Committee. It is rare for a U.S. government
official to comment on Japan's domestic politics.

22) Japan, China considering joint development of "Shirakaba" oil
field, with Japan providing financing; Both sides now nailing down
conditions

NIKKEI (Page 1) (Excerpts)

TOKYO 00001628 015 OF 015


June 16, 2008

The governments of Japan and China, in order to settle the issue of
the development of gas fields in the E. China Sea, have begun to
consider Japan possibly financing the "Shirakaba" gas field
(Chunxiao in Chinese), which China is not developing on its own. The
handling of the Shirakaba project is one of the major sticking
points between the countries. If a compromise settlement can be
reached, it will not be long before a final agreement can be reached
on the gas-field development issue.

Both countries have shelved the issue of designating the EEZ line as
the boundary, since the gulf is too wide to fill. They have decided
to resolve the issue of gas fields in the E. China Sea by joint
development. Working level officials are now boiling down the
conditions, and depending on the conclusion of those talks, a formal
announcement will be made.

SCHIEFFER

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