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Cablegate: Japanese Morning Press Highlights 06/17/08

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SIPDIS

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 06/17/08


Index:

Opinion polls:
1) Fuji-Sankei poll finds 61.3 PERCENT of public not supporting the
Fukuda Cabinet, up 2.3 points, while only 22 PERCENT support it, a
drop of 1.8 points (Sankei)
2) Yomiuri poll has the cabinet support rate at 25.1 PERCENT , a one
point drop from last month, and the non-support rate up 1.3 PERCENT
to 63.4 PERCENT (Yomiuri)
3) 59 PERCENT of the public prefer revision of the medical services
system for the elderly over scrapping it, and 53 PERCENT are
negative about the opposition camp's Diet stance (Yomiuri)
4) Asahi poll shows a slight recovery of the cabinet support rate to
23 PERCENT , but the public is split over evaluating the
opposition's censure motion against Fukuda (Asahi)
5) With the Fukuda cabinet's support rate still sliding, the ruling
parties are becoming even more alarmed about its political future
(Yomiuri)

6) Daniel Russel picked as director of the State Department's Japan
Desk (Sankei)

7) Policy debate intensifies in the Liberal Democratic Party over
whether to stick to a pressure policy toward North Korea or opt for
a dialogue approach (Tokyo Shimbun)

Taiwan crisis:
8) After the sinking of a Taiwan fishing boat near the disputed
Senkakus, Taiwan's representative to Japan resigns, angry over cries
that he "sold out" Taiwan (Asahi)
9) Prime Minister Fukuda pleas for constraint on both sides of the
ship-sinking incident (Asahi)

10) Japan, China to announce later this week an agreement on E.
China Sea joint gas field development, including the Asunaro site
(Sankei)

Political developments:
11) The Democratic Party of Japan's refusal to deliberate anything
in the Diet following the censure motion is tearing apart the
opposition alliance (Nikkei)
12) Former DPJ President Okada, apparently seeking the LDP
presidency again, comes out with his first book that is critical of
political realignment (Tokyo Shimbun)
13) International symposium in Kuala Lumpur worries about Prime
Minister Fukuda's leadership (Asahi)

14) Prime Minister's panel on economic and fiscal policy set to
include a proposal for an environmental tax in the 2008 set of
policy guidelines (Mainichi)

15) Kishida named space development minister (Asahi)

Articles:

1) Poll: Disapproval for Fukuda cabinet tops 60 PERCENT

SANKEI (Page 1) (Abridged)
June 17, 2008

The Sankei Shimbun conducted a joint public opinion survey with Fuji
News Network (FNN) on June 14-15, in which the rate of public

TOKYO 00001643 002 OF 009


support for Prime Minister Yasuo Fukuda and his cabinet reached a
new low of 22.0 PERCENT , down 1.8 percentage points from the last
survey taken Apr. 2-3. The nonsupport rate also rose 2.3 points from
the last survey to 61.3 PERCENT .

In the breakdown of public support for political parties, the ruling
Liberal Democratic Party stood at 24.0 PERCENT , down 3.4 points
from the last survey. The leading opposition Democratic Party of
Japan (Minshuto) rose 0.3 points to 24.6 PERCENT , topping the LDP
for the first time under the Fukuda government. In the survey,
respondents were asked about the form of government they would like
to see after an election for the House of Representatives. To this
question, 44.9 PERCENT chose a grand coalition of the LDP and the
DPJ, topping all other answers. Among other answers, 30.2 PERCENT
picked a DPJ-led coalition, with 16.5 PERCENT preferring an LDP-led
coalition.

2) Poll: Cabinet support at 25 PERCENT

YOMIURI (Page 1) (Full)
June 17, 2008

The public approval rating for Prime Minister Fukuda's cabinet was
25.1 PERCENT , down 1.0 percentage points from the preceding month,
the Yomiuri Shimbun found from its face-to-face nationwide public
opinion survey conducted June 14-15. The disapproval rating for the
Fukuda cabinet improved to 63.4 PERCENT , showing a decrease of 1.3
points. In the breakdown of public support for political parties,
the ruling Liberal Democratic Party stood at 26.0 PERCENT , down 2.5
points from the previous month. The leading opposition Democratic
Party of Japan (Minshuto) was at 20.5 PERCENT , up 2.1 points.

The Diet's current session became the first opportunity for
full-fledged debate in its divided situation, with the ruling
coalition holding a majority of the seats in its lower chamber and
the opposition parties controlling its upper chamber. In the survey,
respondents were asked if they thought the Diet has functioned as a
place to decide on important policies for Japan. In response to this
question, "yes" accounted for only 17 PERCENT , with "no" reaching
73 PERCENT . Respondents were also asked if they approved the LDP
and the DPJ when it comes to their Diet policies. To this question,
66 PERCENT answered "no" to the LDP, with 59 PERCENT also saying
"no" to the DPJ. Meanwhile, the House of Councillors passed a motion
presented by the DPJ and other opposition parties to censure Fukuda.
Asked about this, 50 PERCENT answered that it was meaningless
because it is not legally binding, with 36 PERCENT saying it was
meaningful because it made clear the upper chamber's intention.

3) Poll: 59 PERCENT support healthcare review for elderly

YOMIURI (Page 2) (Abridged)
June 17, 2008

According to findings from a recent nationwide public opinion survey
taken by the Yomiuri Shimbun, 36 PERCENT answered "yes" and 61
PERCENT said "no" when asked if they approved of the government's
newly introduced healthcare system for the elderly. However, "yes"
increased 6 percentage points from the preceding month, with "no"
decreasing 8 points. The public seems to have a better understanding
on the new healthcare system.

The government and the ruling coalition of the Liberal Democratic

TOKYO 00001643 003 OF 009


Party and New Komeito have come up with a plan to improve the new
healthcare system, including measures to lighten the burden on those
in lower income brackets. In the survey, 59 PERCENT answered "yes"
and 38 PERCENT said "no" when respondents were asked if they
approved of this plan. Meanwhile, the leading opposition Democratic
Party of Japan (Minshuto) and other opposition parties are calling
for restoring the previous healthcare system for the elderly. This
opposition standpoint was also approved by 53 PERCENT .

4) Poll: Cabinet support inches up to 23 PERCENT

ASAHI (Page 1) (Full)
June 17, 2008

The rate of public support for Prime Minister Fukuda's cabinet
inched up to 23 PERCENT in a telephone-based nationwide public
opinion survey conducted June 14-15 from the 19 PERCENT rating in
the last survey taken May 17-18. The nonsupport rate was 59 PERCENT
(65 PERCENT in the last survey). The support rate picked up but
still remains low. Meanwhile, public opinion was split over the
House of Councillors' recent passage of a motion censuring Fukuda,
with 42 PERCENT saying "yes" and 39 PERCENT saying "no" when asked
if they approved the motion.

Among those who support the leading opposition Democratic Party of
Japan (Minshuto), 63 PERCENT answered "yes" when asked if they
approved the passage of the censure motion against Fukuda. Among
those with no particular party affiliation, "yes" accounted for 41
PERCENT to the same question, with "no" at 35 PERCENT . Among those
who support the ruling Liberal Democratic Party, 26 PERCENT
answered "yes."

One of the reasons for censuring Fukuda was the government's newly
introduced healthcare system for the elderly. The government and the
ruling parties have decided to amend and maintain the system, while
the opposition camp is insisting on abolishing it. In the survey,
respondents were asked which side they approved. To this question,
30 PERCENT chose the ruling coalition (no change from 30 PERCENT
in the last survey), with 49 PERCENT picking the opposition camp
(53 PERCENT in the last survey). There is still a strong backlash
to the system.

The Diet has now substantially wound up its current ordinary
session. In the survey, respondents were asked about the Diet's
divided situation, in which the ruling coalition holds a majority of
the seats in its lower chamber while the opposition camp controls
its upper chamber. When asked if it was good, 41 PERCENT answered
"yes," with 36 PERCENT saying "no." Among those who support the
DPJ, which has had some of its standpoints adopted in the Diet,
"yes" accounted for 59 PERCENT . Among those unaffiliated, "yes"
accounted for 37 PERCENT , with "no" at 33 PERCENT . Even among LDP
supporters, "yes" accounted for 30 PERCENT . It seems that the
public does not necessarily take a negative view of the Diet's
divided situation.

Meanwhile, Prime Minister Fukuda has proposed a comprehensive
package of environmental countermeasures, including a long-term goal
for greenhouse gas emissions cuts. In the survey, 74 PERCENT
answered "yes" while 13 PERCENT said "no" when asked if they
approved this proposal. The government plans to start emissions
trading this fall. Asked about this system, "yes" accounted for 45
PERCENT , with "no" at 25 PERCENT .

TOKYO 00001643 004 OF 009

Respondents were also asked about the issue of Japanese nationals
abducted to North Korea. North Korea has now promised to look again
into this issue, and the Japanese government has decided to ease
some of its sanctions on North Korea. When asked if progress could
be expected, "yes" accounted for only 12 PERCENT , with "no"
reaching 80 PERCENT .

In the breakdown of public support for political parties, the LDP
stood at 22 PERCENT (leveling off from the 22 PERCENT rating in
the last survey), with the DPJ at 22 PERCENT (26 PERCENT in the
last survey).

5) Poll: Cabinet approval rate falls to the lowest level

YOMIURI (Page 4) (Full)
June 17, 2008

The approval rating for the cabinet of Prime Minister Yasuo Fukuda
has fallen to 25.1 PERCENT , nearly unchanged from the rate
registered in the previous survey, according to a June poll
conducted by the Yomiuri Shimbun. There is a view in the ruling
parties that the declining cabinet support rate has now bottomed
out.

Liberal Democratic Party (LDP) Secretary General Bunmei Ibuki told
the press yesterday: "The public trust in the Prime Minister, who
has made various instructions and has taken the initiative in
dealing with matters, led to the approval rate." The ruling
coalition has analyzed that the cabinet's efforts for enacting a
bill revising the civil servant system and measures to prevent
global warming were supported by the public.

However, the approval rates still remain at a low level. LDP Upper
House Chairman Hidehisa Otsuji told reporters: "We cannot be pleased
at the fact by saying the cabinet approval rate has stopped
falling."

Prime Minister Fukuda told the press corps yesterday: "Since that is
outside my control, I have no choice but to take the outcome."

Meanwhile, Democratic Party of Japan (DPJ) Secretary General Yukio
Hatoyama said: "The disapproval rates greatly surpassed the approval
rates. The Prime Minister should take them as a no-confidence
motion."

6) Daniel Russel to be appointed Japan desk director at U.S.
Department of State

SANKEI (Page 3) (Full)
June 17, 2008

A source connected to U.S.-Japan relations revealed yesterday that
Osaka-Kobe Consul General Daniel Russel will be appointed as Japan
desk director at the U.S. Department of State. His formal
appointment is expected in early July. Russel served as an assistant
to Ambassador Mike Mansfield from 1985 to 1987 at the U.S. Embassy
in Tokyo. He is a Japan expert with ample experience in working in
Japan. He also served at the U.S. mission in the United Nations
Headquarters in New York from 1989 to 1992. He served as deputy
chief of mission in Cyprus from 1999 to 2002 and as deputy chief of
mission in the Netherlands from 2002 to 2005.

TOKYO 00001643 005 OF 009

7) Pressure or dialogue? Divisions intensifying in LDP due to
government's decision to partially lift sanctions on North Korea

TOKYO SHIMBUN (Page 2) (Full)
June 17, 2008

In the wake of the government's decision to partially lift sanctions
on North Korea, the conflict is intensifying in the Liberal
Democratic Party between those calling for pressure and those for
dialogue in dealing with the North.

Those critical of the Fukuda administration's measures include
former Prime Minister Shinzo Abe, former Policy Research Council
Chairman Shoichi Nakagawa, and Lower House member Keiji Furuya, who
have insisted on the need to apply pressure by means of economic
sanctions and other steps.

Fearing that an excessive tilt toward dialogue would end up putting
the abduction and nuclear issues on the backburner, Abe expressed a
sense of alarm, saying: "The policy course rejecting pressure has
not resulted in anything."

Furuya, who is the chief secretary of a parliamentary league on the
abduction issue, released a statement yesterday urging the
government to immediately implement stiffer sanctions against the
North in the event there is no specific progress (on the abduction
issue).

Meanwhile, such members as former LDP Vice President Taku Yamasaki
and former Secretary General Koichi Kato, who have urged the prime
minister to shift the policy direction to dialogue in the view that
pressure would not bring progress to outstanding issues, have
repeatedly made comments welcoming the government's measures.

Yamasaki appearing on a television program on June 16 said:
"Although my prediction that the government would decide on energy
aid (to North Korea) has not come true, (the latest Japan-DPRK
talks) have proven fruitful."

Yamasaki and Kato eye acceleration of the dialogue policy course by,
for instance, exploring a supra-partisan delegation to the North.

8) Sinking of Taiwanese fishing boat near Senkaku Islands: Top
representative in Japan expresses intention to step down, upset by
criticism that he is a "traitor"

ASAHI (Page 8) (Full)
June 17, 2008

Koh Se-Kai (73), head of the Taipei Economic and Cultural
Representative Office in Japan, who was recalled to Taiwan on June
15, held a press conference on the 16th and expressed his intention
to quit over the sinking of a Taiwanese fishing boat after a
collision with a Japan Coast Guard patrol boat near the Senkaku
Islands.

As a reason for his decision to resign, Koh noted that when he
called for a calm response in Taiwan, lawmakers of the ruling
Kuomintang (KMT) harshly criticized him as a traitor. He said that
it is intolerable to remain in office any longer.


TOKYO 00001643 006 OF 009


Koh conveyed his intention to the Foreign Ministry. Upon receiving
approval, he will formally step down. He is an elder of Taiwan's
independence movement. Having lived in Japan for more than 30 years,
he has many acquaintances in Japanese political circles.

The Taiwanese parliament and Ministry of National Defense yesterday
conferred on the dispatch of Navy vessels to waters around the
Senkaku Islands, which Taiwan is looking into on the basis of
demonstrating its sovereignty and protecting its fishing boats.
However, no decision was reached.

Concerning growing anti-Japanese sentiments in Taiwan, the Exchange
Association, Japan's point of contact in Taiwan, on the 16th alerted
Japanese residents in Taiwan, noting that with an anti-Japanese mood
growing, there is the possibility of the safety of Japanese living
in Taiwan being affected.

9) Prime Minister Fukuda calls for self-restraint both from Japan
and Taiwan

ASAHI (Page 8) (Full)
June 17, 2008

Prime Minister Fukuda on the evening of June 16 indicated his stance
to reporters at the Prime Minister's Office (Kantei) that both
Taiwan and Japan need to exercise self-restraint. He said: "Japan
and Taiwan have had a good relationship. It is necessary for both
sides to exercise self-restraint. In particular, Taiwan needs to
cope with the matter in a cool-headed manner. I believe our country
should also tackle the issue in a cool-headed manner."

10) Japan, China also agree on joint development of Asunaro gas
field

SANKEI (Page 5) (Excerpts)
June 17, 2008

Japan and China have agreed to jointly develop the area encompassing
the Asunaro (Longjing in Chinese) gas field, splitting the
development costs on a 50-50 basis, it was learned yesterday. The
two countries have engaged in negotiations on the development of
four gas fields in areas straddling the median line between the two
countries in the East China Sea. Coordination is now underway in
preparation for the official announcement of the joint development
plan by the end of this week. Joint development has been a thorny
issue between the two countries since Japan protested China's
independent development of a gas field in June 2004. But the dispute
is now likely to come to a resolution of sorts.

Even so, there is a slight perception difference between the area
encompassing the Asunaro gas field as Japan envisions and the area
encompassing the Longjing gas field as China cites. Given this, both
sides have to iron out the difference.

As the demarcation line between Japan and China, Japan has cited the
median line, while China has insisted on the Okinawa Trough.

In the talks held so far, the two countries separated the
demarcation issue and agreed on the joint development of the areas
that straddle the median line. China has invested significant funds
in the development of the Shirakaba (Chunxiao in Chinese) gas field,
triggering a dispute with Japan. Japan will also finance the

TOKYO 00001643 007 OF 009


development of this gas field and be given some concession rights.

But Japan will not allow China to develop gas fields, including
joint development, in areas on the Japanese side and will invest
only in developing gas fields in areas on the Chinese side. Both
countries will continue negotiations on cooperation in developing
the remaining two gas fields named Kusunoki (Duanqiao) and Kashi
(Tianwaitian).

11) DPJ's boycott of deliberations creates discord among opposition
parties; Lower House committee meeting toady to discuss quake
damage; JCP calls for deliberations on bill abolishing medical
insurance system for elderly

NIKKEI (Page 2) (Excerpts)
June 17, 2008

The major opposition Democratic Party of Japan's strategy of
boycotting Diet deliberations has caused visible discord among
opposition parties. The DPJ has decided, however, to attend
deliberations on matters connected with Saturday's major earthquake
as an exceptional case in view of their highly urgent nature. The
Japanese Communist Party is also calling for starting Lower House
deliberations on a bill abolishing the medical insurance system for
those aged 75 and older. Both hard-line and flexible views exist in
the DPJ as well. The DPJ leadership from President Ichiro Ozawa on
down is now under pressure to make a difficult decision while with
an eye on public opinion.

In yesterday's Lower House Anti-disaster Special Committee directors
meeting, the ruling and opposition blocs agreed to hear the
government's measures for the Iwate-Miyagi Inland Earthquake from
Disaster Minister Shinya Izumi in a committee meeting on June 17. In
an Upper House Anti-disaster Special Committee meeting, the DPJ also
called for a committee meeting, but it was postponed because the LDP
expressed unwillingness.

After the Upper House adopted a censure motion against Prime
Minister Yasuo Fukuda on June 11, the DPJ came up with a policy
course of boycotting all Diet deliberations, including talks on a
timetable. Nevertheless, in a June 15 meeting of the Diet affairs
chiefs of three opposition parties -- the DPJ, Social Democratic
Party, and the People's New Party - they confirmed a policy
direction of handling deliberations on matters connected with the
earthquake as exceptions.

JCP Secretariat Head Tadayoshi Ichida in a press conference
yesterday expressed his party's eagerness to explain even
independently (the bill abolishing the medical insurance system for
the elderly) and take questions in the Diet, saying: "Like disaster
relief, the medical insurance system is urgent and concerns people's
lives." JCP Diet Affairs Committee Chairman Keiji Kokuta requested
in a meeting with his DPJ counterpart Kenji Yamaoka a session
between the secretaries general of the two parties for returning to
deliberations. In response, Yamaoka bluntly said, "There is no one
in the Diet."

One DPJ member complained about the stance of his party, saying:
"Our party's posture is hard to understand for the general public."
A Diet Affairs Committee executive also commented: "The bill
abolishing the new medical insurance system is closely associated
with the people's livelihood, so we should deliberate on it."

TOKYO 00001643 008 OF 009

12) DPJ's Okada in book: Political realignment argument
irresponsible

TOKYO SHIMBUN (Page 2) (Full)
June 17, 2008

Katsuya Okada, a vice president of the main opposition Democratic
Party of Japan (DPJ), will publish on June 18 for the first time a
book titled Political Change Will Change This Country. In his first
book, Okada criticized calls for political realignment for "totally
irresponsible." He also writes that it is difficult for him to
understand moves of some DPJ lawmakers taking part in the political
realignment argument.

Okada in the book details his political career from 1993 when he
left the Liberal Democratic Party (LDP) through the DPJ's defeat in
the 2005 House of Representative election. During that period, Okada
made efforts to bring about politics that would enable political
change. He, however, does not refer to the internal party situation,
including his assessment of DPJ President Ichiro Ozawa.

Although speculation has been rife that publishing a book prior to
the September party leadership race is his expression for
challenging again the presidential post, Okada denied such
speculation, saying: "I wrote the book in order to bring about
political change. It has nothing to do with the leadership race."

13) Question about Fukuda's leadership raised in World Economic
Forum

ASAHI (Page 10) (Full)
June 17, 2008

(Kono, Kuala Lumpur)

"In Japan, there has been a change of prime ministers frequently.
Can Prime Minister Fukuda take the leadership, although his term
office is expected to be short?"

One participant asked the above question to former Foreign Minister
Yoriko Kawaguchi in a luncheon, hosted by Japan, at the East Asia
Conference of the World Economic Forum held through June 16 in Kuala
Lumpur, Malaysia. The question came when she was showing during her
speech a videotape in which Prime Minister Fukuda spoke of his
enthusiasm for the upcoming Lake Toya Summit in July.

Kawaguchi, who is proficient in English, first said: "Prime Minister
Fukuda's term of office might be long," adding: "In Japan, there are
frequent changes in prime ministers, but the Liberal Democratic
Party has held political power for a very long time." She thus
emphasized that there is no cause of concern about the hosting the
G-8 Summit and the policy management after the Summit.

14) Draft basic policy guidelines note consideration of introduction
of environment tax: No mention of specific timeframe for consumption
tax hike

MAINICHI (Page 2) (Full)
June 17, 2008

The draft of basic policy guidelines on economic and fiscal

TOKYO 00001643 009 OF 009


management and structural reforms for the fiscal 2008 national
budget, which the government will adopt at a cabinet meeting later
this month, was revealed yesterday, June 16. Regarding the drastic
reform of the tax code in the wake of the reallocation of
special-purpose road construction revenues for other uses, the draft
mentions that the overall tax code should be reviewed from the
viewpoint of promoting a low-carbon society, including the handling
of the envisaged environmental tax. In line with this policy
proposal, the draft puts forward a stance of looking into the
introduction of an environmental tax, including the reform of the
gas tax to secure revenues from provisional rates imposed on the gas
tax and other related taxes.

However, a decision on when to actually implement the drastic reform
of the tax code, including a consumption tax hike, has been put off
with the draft simply noting that the drastic reform of the tax
system, including the consumption tax, should be realized at an
early date.

State Minister for Economic and Fiscal Policy Hiroko Ota will submit
the draft to the Council on Economic and Fiscal Policy chaired by
Prime Minister Yasuo Fukuda on June 17. The will then be adopted on
the 23rd after coordination between the government and the ruling
parties. It will be formally adopted at a cabinet meeting at the end
of the month.

The draft notes that the package reform of expenditures and revenues
designed to achieve fiscal soundness, included in the basic policy
guidelines for fiscal 2006, should be kept in place. According to
this policy line, it indicates a stance of realizing a zero-waste
government, based on the introduction of a private-sector business
management method, noting that maximum spending cuts is to be
carried out without backing off previous reform efforts.

15) Kishida tapped as space development minister

ASAHI (Page 4) (Full)
June 17, 2008

Prime Minister Fukuda decided yesterday to appoint Minister of State
for Science and Technology Policy Fumio Kishida as space development
minister to be newly set up based on the Basic Space Law, which was
enacted in May. Kishida will be formally appointed today.

The Basic Space Law lifts the ban on the use of space for defense
purposes. The law also upgrades space development to a national
strategy and governs how to arrange a system led by the government.
Specifically, a space development strategy office will be
established in the cabinet, with the prime minister as head and the
chief cabinet secretary and the space development minister as deputy
heads. The strategy office will be tasked with drawing up a basic
space plan to comprehensively promote measures related to space
development.

SCHIEFFER

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