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Cablegate: Daily Summary of Japanese Press 06/17/08

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PP RUEHFK RUEHKSO RUEHNAG RUEHNH
DE RUEHKO #1653/01 1690818
ZNR UUUUU ZZH
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FM AMEMBASSY TOKYO
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INFO RUEKJCS/SECDEF WASHDC PRIORITY
RHEHAAA/THE WHITE HOUSE WASHINGTON DC PRIORITY
RUEAWJA/USDOJ WASHDC PRIORITY
RULSDMK/USDOT WASHDC PRIORITY
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RUEAIIA/CIA WASHDC PRIORITY
RUEKJCS/JOINT STAFF WASHDC//J5//
RHHMUNA/HQ USPACOM HONOLULU HI
RHHMHBA/COMPACFLT PEARL HARBOR HI
RHMFIUU/HQ PACAF HICKAM AFB HI//CC/PA//
RHMFIUU/USFJ //J5/JO21//
RUYNAAC/COMNAVFORJAPAN YOKOSUKA JA
RUAYJAA/CTF 72
RUEHNH/AMCONSUL NAHA 0782
RUEHFK/AMCONSUL FUKUOKA 8407
RUEHOK/AMCONSUL OSAKA KOBE 2114
RUEHNAG/AMCONSUL NAGOYA 6665
RUEHKSO/AMCONSUL SAPPORO 8992
RUEHBJ/AMEMBASSY BEIJING 3940
RUEHUL/AMEMBASSY SEOUL 9938
RUCNDT/USMISSION USUN NEW YORK 0358

UNCLAS SECTION 01 OF 13 TOKYO 001653

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: DAILY SUMMARY OF JAPANESE PRESS 06/17/08

INDEX:

(1) Poll on Fukuda cabinet, political parties, censure motion
against Fukuda, new healthcare system for elderly (Tokyo Shimbun)

(2) Poll on Fukuda cabinet, political parties, new healthcare system
for elderly, North Korea (Mainichi)

(3) Postal rebels: LDP Election Committee informally nominates
Horiuchi, Hori as candidates for next Lower House election:
"Assassins" fiercely oppose decision (Mainichi)

(4) Prime minister reveals his own initiatives, including global
warming measures, establishment of consumer agency, without waiting
for experts' proposals: Changes approach due to mistrust in
bureaucrats (Mainichi)

(5) Okada makes no reference while Maehara shows confrontational
stance toward DPJ President Ozawa, three months before party
presidential race (Mainichi)

(6) DPJ strategy of boycotting Diet deliberations wavering, faced
with public criticism (Yomiuri)

(7) Idea of taking revote on bill revising Defense Ministry
Establishment Law suddenly crops up in LDP (Tokyo Shimbun) 8
(8) Divided Diet (Part 2): Ruling coalition trying to slice down DPJ
with eye on political realignment (Nikkei)

(9) TOP HEADLINES

(10) EDITORIALS 11

(11) Prime Minister's schedule, June 16 (Nikkei)

ARTICLES:

(1) Poll on Fukuda cabinet, political parties, censure motion
against Fukuda, new healthcare system for elderly

TOKYO SHIMBUN (Page 2) (Full)
June 14, 2008

Questions & Answers
(Figures shown in percentage. Parentheses denote the results of the
last survey conducted May 1-2.)

Q: Do you support the Fukuda cabinet?

Yes 25.0 (19.8)
No 60.2 (66.6)
Don't know (D/K) + no answer (N/A) 14.8 (13.6)

Q: (Only for those who answered "yes" to the previous question)
What's the primary reason for your approval of the Fukuda cabinet?
Pick only one from among those listed below.

The prime minister is trustworthy 20.4 (16.1)
Because it's a coalition cabinet of the Liberal Democratic Party and
New Komeito 12.6 (16.4)
The prime minister has leadership ability 1.2 (0.8)
Something can be expected of its economic policies 5.0 (4.6)

TOKYO 00001653 002 OF 013


Something can be expected of its foreign policies 3.6 (4.1)
Something can be expected of its political reforms 3.7 (3.5)
Something can be expected of its tax reforms 0.9 (0.8)
Something can be expected of its administrative reforms 0.7 (3.6)
There's no other appropriate person (for prime minister) 47.1
(48.1)
Other answers (O/A) 1.3 (0.7)
D/K+N/A 3.5 (1.3)

Q: (Only for those who answered "no" to the first question) What's
the primary reason for your disapproval of the Fukuda cabinet? Pick
only one from among those listed below.

The prime minister is untrustworthy 11.5 (11.1)
Because it's a coalition cabinet of the Liberal Democratic Party and
the New Komeito 5.2 (4.5)
The prime minister lacks leadership ability 28.7 (25.7)
Nothing can be expected of its economic policies 22.2 (26.6)
Nothing can be expected of its foreign policies 1.8 (1.3)
Nothing can be expected of its political reforms 9.3 (8.0)
Nothing can be expected of its tax reforms 6.4 (11.6)
Nothing can be expected of its administrative reforms 4.7 (6.9)
Don't like the prime minister's personal character 5.3 (3.3)
O/A 1.8 (0.3)
D/K+N/A 3.1 (0.7)

Q: The House of Councillors passed a motion censuring Prime Minister
Yasuo Fukuda with a majority of votes from the Democratic Party of
Japan and other opposition parties. What do you think Prime Minister
Fukuda should do?

He does not have to resign because the motion is not legally binding
30.0 (18.5)
His cabinet should resign en masse 8.4 (8.4)
He should dissolve the House of Representatives for a general
election 56.2 (68.1)
D/K+N/A 5.4 (5.0)


Q: Now that the House of Councillors has passed a motion censuring
the prime minister, the DPJ will likely refuse Diet deliberations
from the outset of the next Diet session expected to be called this
summer or later. Do you support the DPJ's stance of refusing Diet
deliberations?

Yes 17.3
No 68.6
D/K+N/A 14.1

Q: The House of Representatives' current term runs through September
2009. When would you like the next election to be held for the House
of Representatives?

As early as possible, this summer or earlier 22.0
This fall or later, within this year 36.4
During the first half of next year 10.9
When the term ends in September next year 23.5
D/K+N/A 7.2

Q: Some LDP lawmakers say the multiple-seat constituency system
should be restored. Do you support this idea?


TOKYO 00001653 003 OF 013


Yes 32.2
No 38.5
D/K+N/A 29.3

Q: The government and the ruling parties plan to improve the newly
introduced healthcare system for the elderly. Specifically, the
ruling coalition will not change the new system's framework but will
lighten the burden on those in lower income brackets. Meanwhile, the
DPJ and other opposition parties are calling for the new system to
be abolished. What do you think about this?

Improve the new system 44.9 (44.0)
Abolish the new system 47.0 (46.5)
D/K+N/A 8.1 (9.5)

Q: What do you think about the idea of raising the consumption tax
rate in a reform of the tax system for next fiscal year in order to
secure revenue for social security, the costs of which are growing
due to the aging population? Do you support this idea?

Yes 36.9
No 56.6
D/K+N/A 6.5

Q: Would you like the present LDP-led coalition government to
continue, or would you otherwise like it to be replaced with a
DPJ-led coalition government?

LDP-led coalition government 35.1 (26.7)
DPJ-led coalition government 40.4 (50.0)
D/K+N/A 24.5 (23.3)

Q: Which political party do you support?

Liberal Democratic Party (LDP) 29.1 (24.3)
Democratic Party of Japan (DPJ or Minshuto) 23.6 (30.3)
New Komeito (NK) 3.2 (3.6)
Japanese Communist Party (JCP) 3.9 (3.7)
Social Democratic Party (SDP or Shaminto) 1.7 (1.6)
People's New Party (PNP or Kokumin Shinto) --- (0.7)
New Party Nippon (NPN or Shinto Nippon) --- (---)
Other political parties, groups --- (---)
None 35.3 (34.4)
D/K+N/A 3.2 (1.4)

Polling methodology: The survey was conducted across the nation on
June 12-13 by Kyodo News Service on a computer-aided random digit
dialing (RDD) basis. Among randomly generated telephone numbers,
those actually for household use with one or more eligible voters
totaled 1,458. Answers were obtained from 1,024 persons.

(2) Poll on Fukuda cabinet, political parties, new healthcare system
for elderly, North Korea

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

Questions & Answers
(T = total; P = previous; M = male; F = female)

Q: Do you support the Fukuda cabinet?


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T P M F
Yes 21 (18) 21 22
No 60 (61) 65 55
Not interested 17 (19) 13 20

Q: (Only for those who answered "yes" to the above question) Why?

T P M F
Because the prime minister is from the Liberal Democratic Party 36
(37) 36 37
Because something can be expected of the prime minister's leadership
9 (8) 11 8
Because there's something stable about the prime minister 28 (28) 23
32
Because something can be expected of the prime minister's policy
measures 15 (18) 17 12

Q: (Only for those who answered "no" to the above question) Why?

T P M F
Because the prime minister is from the Liberal Democratic Party 7
(8) 8 7
Because nothing can be expected of the prime minister's leadership
31 (37) 33 30
Because there's no fresh image about the prime minister 5 (5) 4 6
Because nothing can be expected of the prime minister's policy
measures 54 (49) 53 56

Q: Which political party do you support?

T P M F
Liberal Democratic Party (LDP) 21 (20) 21 21
Democratic Party of Japan (DPJ or Minshuto) 25 (28) 31 19
New Komeito (NK) 4 (3) 2 5
Japanese Communist Party (JCP) 4 (3) 4 4
Social Democratic Party (SDP or Shaminto) 1 (3) 1 1
People's New Party (PNP or Kokumin Shinto) 1 (0) 1 1
New Party Nippon (NPN or Shinto Nippon) 0 (1) 0 --
Other political parties 1 (1) 1 1
None 40 (39) 36 44

Q: The government's newly introduced healthcare system for the
elderly encountered harsh criticism from the public. In response,
the government and the ruling parties decided to take alleviative
measures, such as lightening the burden on those in lower income
brackets. Do you support this?

T P M F
Yes 44 40 48
No 48 53 42

Q: Four opposition parties have presented a bill to abolish the new
healthcare system for the elderly and restore the previous system.
However, the ruling parties are opposed to the move. Do you support
the idea of restoring the previous healthcare system?

T P M F
Yes 56 59 54
No 30 32 27

Q: The DPJ has taken a confrontational stand against the governing
parties in the current ordinary Diet session. Do you approve this

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DPJ response?

T P M F
Yes 47 (41) 49 45
No 43 (51) 44 42

Q: The House of Councillors passed a motion censuring Prime Minister
Fukuda. Prime Minister Fukuda will not dissolve the House of
Representatives and will not step down. Do you approve this
response?

T P M F
Yes 29 27 30
No 61 64 58

Q: North Korea has promised to look again into the issue of Japanese
nationals abducted to North Korea and turn over Japan Airlines
hijackers. In response, the Japanese government decided to lift some
of its sanctions on North Korea. Do you approve this decision?

T P M F
Yes 34 37 31
No 55 55 56

(Note) Figures shown in percentage, rounded off. "0" indicates that
the figure was below 0.5 PERCENT . "--" denotes that no respondents
answered. "No answer" omitted. Figures in parentheses denote the
results of the last survey conducted May 1-2.

Polling methodology: The survey was conducted June 14-15 over the
telephone across the nation on a computer-aided random digit
sampling (RDS) basis. Answers were obtained from 1,008 persons.

(08061607im) Back to Top


(3) Postal rebels: LDP Election Committee informally nominates
Horiuchi, Hori as candidates for next Lower House election:
"Assassins" fiercely oppose decision

MAINICHI (Page 5) (Almost full)
June 17, 2008

The Liberal Democratic Party (LDP) on June 16 informally decided to
officially endorse former General Council Chairman Mitsuo Horiuchi
as a candidate for the Yamanashi No. 2 Constituency and former
Education Minister Kosuke Hori for the Saga No. 3 Constituency in
the next Lower House election. Two incumbent lawmakers have been
contesting to secure nomination in those constituencies. The LDP has
thus picked former "postal rebels," who opposed postal privatization
in the 2005 election, to run for seats in the next Lower House
election. However, so-called "assassins" dispatched by the Koizumi
administration to beat postal rebel candidates in the previous Lower
House election -- Kotaro Nagasaki (incumbent Lower House member for
the South Kanto proportional representation bloc) and Motoko Hirotsu
(incumbent Lower House member for the Kyushu representation bloc),
who lost the battle for LDP sponsorship this time, are fiercely
opposing the party's decision, giving rise to a source of internal
contention.

Election Committee Chairman Makoto Koga and Vice Chairman Yoshihide
Suga held talks separately with senior members of the LDP Yamanashi

TOKYO 00001653 006 OF 013


and Saga Chapters at the party headquarters and conveyed their
informal decisions to them

Suga after the press conference told reporters, "We have chosen
persons who can win." Hirotsu on the afternoon of the 16th told
reporters, "I do not feel that's likely, following the party
decision." Nagasaki was also angy at the party decision, saying, "I
do not understand in what way I am inferior to the person chosen. I
want the party to reconsider its decision."

The Party Election Committee had said that it would adopt objective
numbers, such as the number of party members the candidates acquired
as standards for officially endorsing them. Nagasaki had the largest
number of people join the LDP last year. As such, there is vagueness
about the reasons why Nagasaki and Hirotsu were not chosen. As a
remedial measure, there is an idea of giving special treatment to
Nagasaki, by placing him in the upper echelon of the proportional
representation list. However, Nagasaki is determined to decline such
an offer.

(4) Prime minister reveals his own initiatives, including global
warming measures, establishment of consumer agency, without waiting
for experts' proposals: Changes approach due to mistrust in
bureaucrats

MAINICHI (Page 5) (Full)
June 17, 2008

Prime Minister Yasuo Fukuda has recently released his own
initiatives before experts' groups came up with policy proposals.
The Round-Table to Discuss the Global Warming Issue, chaired by
Hiroshi Okuda, advisor to Toyota Motors, released a package of
proposals on June 16. However, the prime minister had released its
specifics as the Fukuda Vision on the 9th. He also released the
consumer agency initiative without waiting for the issuance of the
final report. Mistrust in bureaucrats appears to be behind this
behavior. However, persons close to the prime minister are perplexed
at his bypassing them.

The prime minister at first intended to release the Fukuda Vision,
after the panel released its proposals. However, the panel was
having difficulty coordinating views of the Foreign Ministry, the
Ministry of Economy, Trade and Industry and the Environment Ministry
with its proposal for adopting a domestic carbon emissions trading
system meeting strong opposition. Feeling frustrated, the prime
minister complete the Fukuda Vision with several staff members and
released it without notice.

Regarding the consumer agency issue as well, the prime minister
released a plan for the establishment of a consumer agency in 2009
on April 23, when discussion on the issue was still half-baked. The
Consumer Administration Promotion Council, chaired by Takeshi
Sasaki, professor at Gakushuin University, was set to release a
final plan on June 13. Anticipating resistance from government
agencies, he led the move to release the plan.

The prime minister has aimed at coordination-based policy-making
style in cooperation with various government agencies, disliking
former Prime Minister Junichiro Koizumi's top-down policy-making
formula. However, he appears to have gradually changed his approach,
deepening mistrust in bureaucrats due to a series of blunders made
by them and the Ministry of Health, Labor and Welfare's response

TOKYO 00001653 007 OF 013


regarding the new health care plan for the elderly aged 75 or
older.

A government source spoke for the prime minister's stand, noting,
"Nothing will be decided through coordination among various
government agencies." However, the government agencies' side is
increasingly becoming discontent with the prime minister's approach,
with one Foreign Ministry official noting, "There is concern about
the prime minister making mistakes, if he does not properly use
government offices, which have expertise."

(5) Okada makes no reference while Maehara shows confrontational
stance toward DPJ President Ozawa, three months before party
presidential race

MAINICHI (Page 5) (Full)
June 17, 2008

Katsuya Okada, vice president of the Democratic Party of Japan
(DPJ), will publish on June 18 his first book titled, "A change of
government" (Kodansha Ltd.). In the book, Okada sums up the
political activities he carried out until he stepped down as party
head in 2005. He stresses the need for a change of government. But
the book makes no comment about President Ichiro Ozawa. Meanwhile,
Seiji Maehara, another vice party president, cites in a contribution
to a monthly magazine three major policy differences between him and
Ozawa as points of contention in the upcoming party presidential
race. Now that the two vice presidents are coming under the
spotlight in the run-up to the presidential election three months
from now, party members are discussing the differences in their
policy stances.

Okada writes that when he was elected to the House of
Representatives for the first time in 1990, he regarded then Liberal
Democratic Party (LDP) Secretary General Ozawa the "father of the
political world." The book explains why Okada publicly voiced an
objection for the first time to Ozawa's move to disband Shinshinto
(the New Frontier Party) and departed from his following in 1997.
But in his book, without mentioning the present state of his
relations with Ozawa, Okada suggests that there is a feeling of
distance from him, stating, "I see him as my senior in the political
world." In order for the party to grab political power, Okada
stresses the necessity of party unity. He lists as the areas in
which he intends to carry out reform on a priority bases should his
party assume political power: (1) social security; (2)
decentralization; and (3) fiscal structural reform.

Meanwhile, Maehara, in an article titled "Can the Democratic Party
take over the reins of government?" in the July edition of the
monthly Voice, lists such policies as income compensation to each
farmer, decentralization to divide all local districts across the
nation into 300 municipalities; and priority given to the United
Nations. He then highlights the differences between his policy
stances and those of Ozawa. He emphasizes that in order to win the
next party presidential race, "Thorough debate with President Ozawa
is necessary in the campaign."

Asked about his running in the presidential race, Okada states, "I
would like to refrain from making any comment." But Maehara has told
his close aides: "I don't want to run for the election, but if
nobody stands as a candidate, I feel I would have to run in it."


TOKYO 00001653 008 OF 013


(6) DPJ strategy of boycotting Diet deliberations wavering, faced
with public criticism

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

The Democratic Party of Japan (DPJ) has boycotted deliberations in
the two Houses of the Diet since a censure motion against Prime
Minister Fukuda was adopted in the House of Councillors. But some
party members have begun to move to return to Diet deliberations.
They have decided to attend a meeting of the House of
Representatives Anti-Disaster Committee today. In addition, they are
willing to attend the meetings of each committee and a plenary
session to be held on June 19-20 for adopting the procedures to
adjourn the Diet session. Asked about what response the party would
take in the next extraordinary Diet session, a DPJ executive
replied: "Our stance of refusing deliberations under the censured
prime minister will remain unchanged." But some DPJ members are
calling on the leadership to review this Diet strategy.

Special case

Meeting with his Japanese Communist Party (JCP) counterpart Keiji
Kokuda in the Diet Building yesterday, DPJ Diet Affairs Committee
Chairman Kenji Yamaoka pointed out the propriety of the DPJ's
stance. Yamaoka said: "We will attend meetings on working out
countermeasures against natural disasters as a special case, because
such is a humanitarian task. The health insurance system for people
aged 75 or older is a different matter because that is a policy
issue."

Yamaoka stressed that the DPJ will attend meetings of the
Anti-Disaster Committee following the powerful earthquake in the
Tohoku district but reject deliberations on a bill submitted jointly
by four opposition parties to scrap the elderly health system, in an
attempt to underscore the party's consistent stance of boycotting
Diet deliberations.

A senior DPJ member reiterated: "Should public support for the
cabinet decline further, the prime minister will be pressed to step
down after the July Lake Toya Summit in Hokkaido. To that end, the
DPJ has to assume a defiant attitude."

Test of patience

However, the public is taking a harsh view of the DPJ strategy in
the Diet. In an opinion poll conducted on June 14-15 by Yomiuri
Shimbun, a majority of respondents agreed that the censure motion
had been meaningless.

In response, DPJ Policy Research Council Chairman Naoshima said
yesterday: "We will take seriously the severe evaluations. We must
reconsider our strategy of boycotting deliberations." A veteran
lawmaker also stressed the need for a flexible response, saying: "If
the government compiles a supplementary budget to finance measures
to reconstruct quake-hit areas and calls a special Diet session, we
should respond to calls for deliberations in a positive manner."

Meanwhile, the Liberal Democratic Party and the New Komeito have
started coordination with the DPJ to hold a meeting during the
ongoing Diet session of the House of Representatives Special
Committee on the issue of the past abductions of Japanese by North

TOKYO 00001653 009 OF 013


Korean agents in order to deliberate on a partial removal of the
nation's sanctions against North Korea. A senior New Komeito member
said: "If we hold as many meetings as possible by the end of the
session, the DPJ will find it difficult to reject deliberations in
the next extraordinary Diet session."

A senior DPJ member grumbled yesterday: "We would like to give heed
to the public's call on us to join Diet deliberations, but since we
chose a boycott strategy in the belief that it will result in
benefiting the people, we will have to patiently wait the other one
out."

(7) Idea of taking revote on bill revising Defense Ministry
Establishment Law suddenly crops up in LDP

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

The idea of holding a revote in the House of Representatives on a
bill amending the Defense Ministry Establishment Law and enacting
the bill before the June 21 closing of the current regular session
is being floated in the ruling Liberal Democratic Party (LDP). If an
overriding vote is held in the Lower House, it will become the third
one during the ongoing session.

The Defense Ministry Establishment Law revision bill was adopted on
April 15 in a Lower House plenary session with support (not only by
the ruling parties) but also by the main opposition Democratic Party
of Japan. However since priority was given to other bills in the
House of Councillors Committee on Foreign Affairs and Defense,
deliberations on the revision bill have never be held. On June 14,
60 days passed since the bill had been forwarded the Upper House.
Therefore, it will be possible for the Lower House to hold a revote
on the legislation in line with the constitutional 60-day rule.

During the current Diet session, the ruling coalition has already
twice taken overriding votes: one on the bill revising the Special
taxation Measures Law and the other on the bill amending the Road
Construction Revenues Special Exemption Law. If a two-thirds
overriding vote is held on the bill revising the Defense Ministry
Establishment Law, it would be the first time for the revision bill,
for which the DPJ voted in the Lower House, to be put to a second
vote.

The dominant view in the ruling camp is that it is not necessarily
to enact the bill by overriding an Upper House decision. The New
Komeito, the LDP's junior coalition partner, has taken a cautious
stance.

However, with an eye on a political timetable for the summer and
after, it is not that simple story. The government plans to submit
to the next extraordinary Diet session a bill amending the new
Antiterrorism Special Measures Law, intended to allow the Maritime
Self-Defense Force (MSDF) to continue its refueling mission in the
Indian Ocean.

In the Upper House, like the bill amending the Defense Ministry
Establishment Law, the new MSDF refueling bill will be deliberated
in the Foreign Affairs and Defense Committee. In the upper chamber
committee chaired by Toshimi Kitazawa of the DPJ, the ruling camp
had difficulties in dealing with important bills and treaties from
the previous extra session through the ongoing regular session. The

TOKYO 00001653 010 OF 013


similar situation is expected to occur in dealing with the bill
amending the new Antiterrorism Special Measures Law.

A senior LDP Upper House member has asserted that a revote on the
bill revising the Defense Ministry Establishment Law should be held
during the current Diet session, arguing: "If the revision bill is
left in the Foreign Affairs and Defense Committee, such will be used
as an excuse for delaying deliberations on the bill."

LDP Diet Affairs Committee Chairman Tadamori Oshima told reporters
on June 13: "We will make a decision after carefully considering
whether the public can understand (a revote)."

(8) Divided Diet (Part 2): Ruling coalition trying to slice down DPJ
with eye on political realignment

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

"Mr. Ozawa is a habitual liar," Prime Minister Yasuo Fukuda grumbled
to a senior ruling coalition member. Fukuda appears to be unable to
put up with the Democratic Party of Japan (DPJ), as headed by Ichiro
Ozawa, disagreeing repeatedly with his nominations for the Bank of
Japan governor. The senior member clearly said: "The relationship of
the two has been severed since March."

Even if the ruling camp keeps its majority in the next House of
Representatives election, the opposition bloc will continue
controlling the House of Councillors. Unless the ruling coalition
wins opposition forces over to its side, it will be difficult for
them to push forward with Diet business. Therefore, the ruling camp
has been seeking behind closed doors ways to peel off DPJ Upper
House members.

The move's behind-the-scenes architects include Liberal Democratic
Party (LDP) General Council Chairman Toshihiro Nikai, who has
channels of communication to the largest opposition party, and
Tetsuro Yano, former LDP Upper House Diet affairs committee
chairman. They have often invited some DPJ lawmakers to their
meetings at night and proposed forming a third conservative force.
The ruling camp, however, is having difficulties in implementing its
plan because the possibility of the DPJ assuming power is moving
closer to reality and because there are many instances where
candidates from the two parties would face off against each other in
the Lower House single-seat constituency races. Only a couple of DPJ
members have always participated in LDP-sponsored meetings. In the
opposition camp, as well, there is a mood aimed at implementing
policies in cooperation with the ruling parties. Less than 80
PERCENT of the government-sponsored bills submitted to the current
Diet session have been enacted. At the final stage of the ongoing
session, lawmaker-sponsored bills, including one revising the
Atomic-bomb Victim Assistance Law, cleared the Diet in succession.

A rush of nonpartisan parliamentary leagues and study groups that
have been quickly formed were motivated by a desire to ease policy
disputes in the divided Diet. Former LDP Secretary General Hidenao
Nakagawa, a member of the Machimura faction, is actively on the
move. He places priority on economic growth and reform of the
government office district of Kasumigaseki, although he is reluctant
to hike the consumption tax rate.

In the Machimura faction, a study group using a book as a text

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written in May by Nakagawa has been launched. The speculation has
spread in political circles that Nakagawa is trying to take the
initiative in reorganizing the political parties.

On June 12, Nakagawa and Seiji Maehara, former DPJ president, called
on Economic and Fiscal Policy Minister Hiroko Ota and asked the
minister to incorporate a strategy of Japan becoming a
marine-oriented nation in the government's big-boned reform policy
guidelines for 2008. Nakagawa and Maehara are also advocates for the
formation of a parliamentary group to consider tobacco and the
people's health, which was launched on June 13.

In the capital district of Nagatacho, former Prime Minister
Junichiro Koizumi is regarded as one of the key persons advocating
political realignment. His remark in April that Maehara would become
a presidential candidate became a hot topic of political
conversations. He appears to be enjoying the uproar between the
ruling and opposition camps.

In an LDP Lower House member's wedding ceremony on June 4, Koizumi
told Administrative Reform Minister Yoshimi Watanabe: "You should
work in cooperation with the DPJ from now on."

(9) TOP HEADLINES

Asahi:
Government to disburse state subsidies to 7 quake-hit municipalities
earlier than scheduled

Mainichi:
Number of completely or half-collapsed houses in northeastern Japan
quake totals 10

Yomiuri:
Senior MLIT official, others arrested in Hokkaido bid-rigging

Nikkei:
Poll: Sales of food products decline after price hikes

Sankei:
Scale of landslides largest ever in northeastern Japan quake

Tokyo Shimbun:
Fukutoshin Line hit by delays for three consecutive days

Akahata:
JCP proposes emergency talks among four opposition parties with aim
of starting deliberations on bill scrapping elderly health plan

(10) EDITORIALS

Asahi:
(1) Amakudari continuing to create hotbed of government agency-led
bid rigging
(2) 3rd oil crisis: Use investment funds for new energies

Mainichi:
(1) Senkakus: Taiwan, too, should take responsible action
(2) Economy in recession: Pump-priming measures unneeded

Yomiuri:
(1) Looming economic crisis needs flexible response

TOKYO 00001653 012 OF 013


(2) Arrest of MLIT official: Eradicate hotbed of government
agency-led bid rigging!

Nikkei:
(1) Is Hokkaido Regional Development Bureau an office for bid
rigging?
(2) Japan-Australia cooperation strategically important

Sankei:
(1) Iwate-Miyagi earthquake: Consider quakes in urban areas
(2) Intrusion into Japanese waters: Firm and calm response
necessary

Tokyo Shimbun:
(1) Japan-Taiwan relations: Prevent the Senkaku issue from flaring
up again
(2) Arrest of MLIT official: Hokkaido not a "sacred cow"

Akahata:
(1) Child-care system made worse: JCP to make efforts for
child-support programs

(11) Prime Minister's schedule, June 16

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

08:20
Attended a global warming council meeting at the Kantei.

09:24
Met Vice Foreign Minister Yabunaka, Asian and Oceanian Affairs
Bureau Director-General Saiki, in the presence of Chief Cabinet
Secretary Machimura and Deputy Chief Cabinet Secretary for Crisis
Management Ito, joined in by Deputy Chief Cabinet Secretary
Futahashi. Machimura, Futahashi and Ito stayed on.

09:51
LDP International Competitiveness Research Council Chairman Omi and
chief secretary Gotoda.

10:18
Met former Ambassador to the U.S. Kato, followed by Cabinet
Intelligence Director Mitani. Afterward, met Economic and Fiscal
Policy Minister Ota in the presence of Assistant Chief Cabinet
Secretary Saka. Ota stayed on.

11:01
Met Yabunaka. Afterward attended a meeting of cabinet ministers
connected with the Iwate-Miyagi Inland Earthquake. Afterward met
Climate and Energy Minister Hedegaard of Denmark.

14:07
Met LDP Public Relations Headquarters chief Kawamura, followed by
Machimura. Afterward attended an agricultural, commerce and
industrial summit.

15:03
Met MOF European Affairs Bureau Director-General Harada and Finance
Ministry International Bureau Director-General Tamaki, followed by
advisor Ito.


TOKYO 00001653 013 OF 013


16:30
Attended an LDP executive meeting. Policy Research Council Chairman
Tanigaki and former MHLW Minister Kawasaki stayed on.

17:03
Met New Komeito Representative Ota, his deputy Inoue, and Upper
House Caucus Chairman Koba. Ota stayed on. Afterward attended a
meeting of cabinet ministers connected with the monthly economic
report.

18:06
Met Machimura. Afterward attended an anti-crime cabinet ministers
meeting. Afterward met Internal Affairs and Communications Minister
Masuda and Fire and Disaster Management Agency Director-General
Araki.
19:50 Returned to his official residence.

SCHIEFFER

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