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Cablegate: Japanese Morning Press Highlights 07//08

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UNCLAS SECTION 01 OF 13 TOKYO 002089

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 07//08

Index:

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

Political agenda:
4) Prime Minister Fukuda to make final decision today on shuffling
his cabinet, with the likely date being Aug. 4 (Mainichi)
5) Aug. 4 under Eastern astrology is a bad-luck day for a cabinet
shuffle (Yomiuri)
6) Why is Fukuda waiting for the return of two cabinet ministers
from the WTO before shuffling his line up? (Mainichi)
7) Democratic Party of Japan (DPJ) taking a wait and see posture
toward pending cabinet shuffle, expecting an early Diet dissolution
(Nikkei)
8) If Prime Minister slips up in the makeup of his new cabinet,
there will calls in the party for him to step down (Tokyo Shimbun)

9) New Komeito continues to distance itself from the LDP (Yomiuri)


Trade and economic issues:
10) WTO negotiations ended in rupture, but Japanese agriculture,
having dodged that bulled, remains nervous about the future (Tokyo
Shimbun)
11) Economic indices show the economy deteriorating (Mainichi)
12) New bill creating a consumer affairs agency states that is the
country's responsibility to protect consumers (Tokyo Shimbun)

Defense affairs:
13) USFJ realignment process still unclear, despite subsidies award
to 38 local government affected by the moves (Mainichi)
14) Okinawa assembly delegation meets Democratic Party of Japan,
which promises support on opposing relocation of Futenma Air Station
to Nago (Nikkei)
15) Japanese Communist Party meets Okinawa delegation, promises
cooperation in anti-base efforts, support for scrapping
controversial health insurance plan (Akahata)
16) DPJ will refuse to discuss extension of the Indian Ocean
refueling bill in the Diet (Nikkei)
17) ASDF airplane practices in Beijing in preparation for Fukuda's
pending visit to the opening ceremony of the Olympic Games (Nikkei)


18) Arriving in Japan are 208 Indonesian nurses and caregivers, but
the number is only 40 PERCENT of that planned (Mainichi) 13

Articles:

1) TOP HEADLINES

Asahi:
MEXT mulling opening public, university advanced-research equipment
for private-sector use

Mainichi:
Fukuda eyes cabinet shuffle, most likely on August 4

Yomiuri: Sankei
Half of private universities under-enrolled; Increase in
applications for well-known colleges

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Nikkei:
TDK to buy top European electronic parts maker for up to 200 billion
yen

Tokyo Shimbun:
Consumer agency establishment bill stipulates that government is
responsible for protecting consumers; Penal regulations against
offenders

Akahata:
WTO talks break down; Developing countries reject U.S. request for
liberalization

2) EDITORIALS

Asahi:
(1) WTO negotiations break down: Hurry to make fresh start to reach
agreement
(2) New Komeito head Ota should give more explanations

Mainichi:
(1) Rupture of WTO talks: Make all-out efforts to resume
negotiations quickly
(2) Budget request guidelines for fiscal 2009: Revitalization of
budget compilation process needed

Yomiuri:
(1) WTO talks break down: Stagnation in reform of agricultural
administration unforgivable
(2) Will emergency subsidies for fishing industry lead to
strengthened structure?

Nikkei:
Who will defend the world from protectionism?

Sankei:
(1) WTO negotiations fall apart: Use resourcefulness for early
resumption of talks
(2) Seattle Mariners star Ichiro reaches 3,000 hits

Tokyo Shimbun:
(1) WTO talks break down: Do not allow free trade to drift away
(2) Social security plan: We want peace of mind

Akahata:
(1) WTO negotiations break down: Overcome the stance of giving trade
liberalization absolute priority

3) Prime Minister's Official Residence (Kantei)

Prime Minister's schedule, July 30

NIKKEI (Page 2) (Full)
July 31, 2008

09:54
Arrived at Haneda Airport to send Crown Prince Naruhito off to
Tonga.

11:00
Arrived at his official residence.

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11:07
Met at the Kantei with Administrative Reform Minister Watanabe and
Public Servant System Reform Taskforce Head Tachibana. Handed a
written appointment over to Assistant Deputy Chief Cabinet Secretary
Kaai, with Chief Cabinet Secretary Machimura and deputy chief
cabinet secretaries Ono, Iwaki, and Futahashi.

12:02
Met journalist Soichiro Tawara, Central Japan Railway Company
Chairman Yoshiyuki Kasai, and others at the Garden Court Clut in the
Hotel New Otani.

13:27
Met at the Kantei with Futahashi. Followed by Machimura.

13:52
Met Secretary General Ibuki and Machimura. Ibuki stayed behind.

14:25
Met Machimura.

15:25
Met Cabinet Intelligence Director Mitani.

16:11
Received greetings from reassigned senior members of the Ground,
Maritime, and Air Self-Defense Forces.

18:31
Met Machimura. Followed by Futahashi.

19:04
Returned to his official residence.

4) Prime Minister to carry out shuffling of his cabinet, mostly
likely on Aug. 4

MAINICHI (Top play) (Abridged)
July 31, 2008

Prime Minister Yasuo Fukuda yesterday firmed up his intention to
carry out in early August a shuffling of his cabinet, with the most
likely date being August 4. The Prime Minister on the afternoon of
July 30 met with Liberal Democratic Party (LDP) Secretary General
Ibuki at his official residence, and he told him that after
receiving the reports on the WTO talks in the evening of July 31
from Agricultural Minister Wakabayashi and Minister of Economy,
Trade, and Industry Amari, who are returning to Japan today, "I will
make my own decision, and then discuss my thinking with the party."
The Prime Minister last evening told the press corps this about the
cabinet shuffle: "It is necessary for me to properly bring this
matter to a close."

A prime ministerial aide explained the Prime Minister's statement:
"The Prime Minister will carry out a shuffle. Coordination is about
finished." In connection with the shuffle, the focus will be on how
he will rebuild his team, against the background of the public
uncertainty growing toward the economy that is being buffeted by
soaring oil and food costs, and the need to strengthen economic
measures and an election strategy, with an eye on the timing of the
next Lower House election. The proposal also has been floated of

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adding economic advisers to the current group of three prime
ministerial assistants.

In connection with managing the political situation, including the
cabinet shuffle, the ruling parties' secretaries general, policy
council chairpersons, and Diet affairs chairpersons met yesterday
morning at a hotel near the Diet building. They agreed to discuss
separately the timing of the extraordinary Diet session, about which
views are split in the ruling camp about convening it in late August
or late September in connection with the issue of extending the
Anti-Terrorism Special Measures Law, and the cabinet shuffle. After
the meeting, the Komeito's Diet Affairs Committee chairperson told
the press, "We will not link the question of whether to shuffle the
Cabinet or not to the issue of the timing of the convening of the
extra Diet session."

With the Komeito, which is seeking a late September convening of the
extra Diet session, having in mind a delay in extending the
Anti-Terrorism Special Measures Law, having agreed to an early
shuffling of the cabinet, the Prime Minister will soon meet with
Komeito head Ota and inform him of his decision to shuffle the
cabinet.

5) Is August 4, designated an unlucky day on the Buddhist calendar,
a good day for a cabinet shuffle?

YOMIURI (Page 4) (Full)
July 31, 2008

The prevailing view about setting the date for a cabinet shuffle
has always been whether the day is auspicious or not.

Many in the ruling coalition presume that Prime Minister Yasuo
Fukuda will likely shuffle his cabinet on August 4, but that date
on the Buddhist calendar is designated as an extremely unlucky day
(butsumetsu). In the postwar period from the Higashikuni cabinet to
the Fukuda cabinet, there have 84 cabinet shuffles. Looking at when
they occurred the recurring six-day cycle of lucky and unlucky days
that are incorporated into Japanese calendars: 20 shuffles were
carried out on a day called senbu (when actions achieve no results);
18 on a day called taian (a lucky day); 16 on a day called tomobiki
(a good day for weddings and bad day for funerals); 13 on a day
called shaku (when the moonlight hours alone are auspicious); 12 on
a day called sensho (win the first game); and 5 on the day called
butsumetsu (a very unlucky day).

It is rare to carry out a cabinet shuffle on a day when bad luck is
everywhere.

Fukuda completed the formation of his cabinet last Sept. 25 (also a
very unlucky day), but the Imperial attestation ceremony for his
cabinet was held on Sept. 26 (taian). So, at least the Fukuda
cabinet was formally inaugurated on a lucky day.

The last cabinet to have been formed on a very unlucky day
(butsumetsu) was the second Nakasone cabinet, which was launched on
Dec. 27, 1983.

6) Cabinet shuffle possibly on Aug. 4; DPJ to watch situation calmly
while hoping for early Lower House dissolution

MAINICHI (Page 5) (Excerpts)

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July 31, 2008

Prime Minister Yasuo Fukuda has made up his mind to shuffle his
cabinet early next week. The major opposition Democratic Party of
Japan basically intends to watch the situation calmly to determine
the party's move. DPJ President Ichiro Ozawa reiterated his stock
argument of taking power through a Lower House dissolution and snap
general election, with a party executive predicting a general
election in November to apply pressure on the prime minister.

DPJ Deputy President Naoto Kan, in a lecture meeting in the city of
Fukuoka yesterday, said: "The prime minister has not been able to
make decisions on three points: a cabinet shuffle, the convocation
of the next extraordinary Diet session, and a Lower House
dissolution. He is such an indecisive person." Kan also indicated
that his party would discuss a response to the extraordinary Diet
session once the ruling bloc's plan on the three factors becomes
clear.

President Ozawa held a press conference in Sapporo yesterday in
which he underlined the need once again for a change of government.
He said: "Mr. Fukuda's aptitude is a problem. The current LDP
administration has not been able to deal with a variety of issues.
The LDP should become an opposition party and restudy matters."

The LDP's coalition partner New Komeito seems reluctant to extend
the new Antiterrorism Special Measures Law, the legal basis for the
continuation of the Maritime Self-Defense Force's refueling
operations in the Indian Ocean. This has resulted in the shared view
in the DPJ leadership that there is growing momentum in the ruling
bloc to unseat Fukuda. Some LDP members think that it is inadvisable
to face a Lower House dissolution and general election under Prime
Minister Fukuda.

Under the situation, Diet Affairs Committee Chairman Kenji Yamaoka
predicted a general election in November during a press conference
in Oyama City, Tochigi Prefecture. He said: "(The next general
election) will occur in November. If that does not happen, Lower
House dissolution will occur under someone other than Prime Minister
Fukuda. The current administration is losing steam and is of the
conclusion that it is advisable to carry things out at the earliest
possible time. They are in a way copying our approach of doing
things after taking power, though what happens afterwards is of no
concern to them."

Why is prime minister waiting for return of two cabinet ministers?

Prime Minister Fukuda indicated yesterday to LDP Secretary General
Bunmei Ibuki that he would make a decision on a cabinet shuffle
after two cabinet ministers return home from WTO trade talks. That
is because the prime minister thinks it would be rude to discuss a
cabinet shuffle before the two have returned home, as they conducted
marathon trade negotiations for the sake of the national interest,
according to a senior government official. Envisaging a cabinet
shuffle in early August, Foreign Minister Masahiko Koumura forwent a
trip to three countries, including India. According to the Cabinet
Affairs Office, it is possible to shuffle the cabinet even when
cabinet ministers are not in Japan.

In shuffling the cabinet, it is customary for the prime minister to
convene an extraordinary Diet session and receive letters of
resignation from all cabinet ministers. It is followed by the

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appointment of new cabinet ministers by the prime minister and an
attestation ceremony at the Imperial Palace. Koumura is believed to
have cancelled his overseas trip in consideration of the countries
he was supposed to visit and of a situation in which he would have
to attend an extraordinary Diet session.

According to the Cabinet Affairs Office, the submission of letters
of resignation by cabinet ministers is not required by law, and the
prime minister is allowed to confirm cabinet ministers' intention to
resign over the phone. Prime Minister Fukuda apparently said he
would wait for the two cabinet ministers to return home in maximum
consideration for harmony in the ruling camp.

7) DPJ leadership race: Okada not eager to run; Noda, Eda now seen
as possible candidates to run against Ozawa

NIKKEI (Page 2) (Excerpts)
July 31, 2008

Democratic Party of Japan Vice President Katsuya Okada, delivering a
speech at the Japan National Press Club yesterday, expressed
reluctance to run in the party's presidential race, saying, "At
present, I don't have a strong desire." It was the first time for
Okada, who was regarded as a possible candidate, to officially
clarify his stance. With chances growing that DPJ President Ichiro
Ozawa will win a third term, moves by Yoshihiko Noda, Yukio Edano
and others as possible candidates against Ozawa are likely to draw
attention.

Touching on his responsibility for the party's defeat in the 2005
Lower House election, Okada said: "I have thought that I should
practice self-control until the results of the next Lower House
election come out. If I were to lead the campaign, it would be a
repetition of the same election. Even if I clearly present a vision
on fiscal resources and policy, I would not be able to say with
confidence that the environment has drastically changed since
2005."

He also said about Ozawa: "There is no question about his great
accomplishments in the previous Upper House election. He has done
superbly since then as well." At the same time, Okada indicated that
ideally the leadership race should be fought by a number of
candidates, saying, "The leadership race proves a good opportunity
for policy debate. It can be defined as a step toward the next Lower
House election."

Until yesterday, Okada had remained mum about the possibility of
joining the race. Now that he has showed a strong negative stance,
moves in the DPJ to field candidates against Ozawa are likely to
enter a new phase.

Although mid-level and young members are eager to back Noda, Noda
himself has kept silence about the race. Their calls for Noda's
candidacy are likely to grow. The Ryounkai group composed of
mid-level and junior members who are close to Seiji Maehara is also
likely to accelerate efforts to find a rival to Ozawa. Edano has
indicated to other DPJ members that he would consider running if
Okada does not throw his hat in the ring.

At the same time, the move, centering on the party leadership, to
realize Ozawa's third term is gaining momentum. Diet affairs chief
Kenji Yamaoka, in a press conference yesterday in the city of Oyama

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in Tochigi Prefecture, positively evaluated Okada's remarks as
coming from his good sense in consideration of the party.

Meanwhile, Deputy President Naoto Kan, in a workshop held in Fukuoka
by a group of lawmakers close to him, commented: "The party head
should look tough to rivals. The LDP thinks Mr. Ozawa formidable."
In the meeting, many voiced support for Ozawa. Support for Ozawa is
also spreading among former members of the Social Democratic Party
and the Japan Socialist Party. "More than half of the DPJ lawmakers
are supportive of Mr. Ozawa," a senior member said.

8) Cabinet reshuffling plan to be announced today: Ruling camp to
put off decision on extraordinary Diet, amending new refueling bill;
Fukuda in precarious situation

TOKYO SHIMBUN (Page 2) (Abridged slightly)
July 31, 2008

The Liberal Democratic Party (LDP) and the New Komeito have been at
odds over when to convene the extraordinary Diet session and how to
deal with a bill amending the New Antiterrorism Special Measures
Law. The LDP has decided to postpone a decision until after a
cabinet shuffle and a reshuffle of the leadership of the LDP.

LDP Secretary General Bunmei Ibuki at a meeting of the secretaries
general, Diet affairs committee chairmen and policy research council
chairmen of the ruling parties held at a Tokyo hotel on the morning
of July 30 said, "We will have the new leadership consider when to
convene the extraordinary Diet session and how to deal with the
bill."

Ibuki and Tadamori Oshima, chairman of the LDP Diet Affairs
Committee, had envisaged a scenario of convening the extraordinary
Diet session in late August, by extensively speeding up the
timetable of the average year. The frontloading is aimed at securing
a Diet deliberation schedule to readopt an extension of the
refueling law in the Lower House and enact it by January 15 next
year, when the new refueling law, which serves as the basis for
refueling operations by Self-Defense Force personnel in the Indian
Ocean, expires.

The New Komeito has been calling for convening the extraordinary
Diet session in late September, saying that it is not necessary to
forcibly enact the bill amending the new refueling law, as the
public's views on that are divided.

With a possible dissolution of the Lower House around the turn of
the year in mind, New Komeito is calculating that it would be wise
to give priority to such issues as measures to address the steep
rise in crude oil prices, including compiling a second budget,
instead of readopting the bill, which could incur a negative
reaction from the public.

Since many in the LDP are envisaging a political schedule of
shuffling the cabinet in early August and convening the
extraordinary Diet session in late August, some New Komeito members
have been cautious about a cabinet shuffle as well.

The LDP's decision to postpone convening the extraordinary Diet
session until after a cabinet shuffle came amid the ongoing
confrontation with the New Komeito leadership. The New Komeito was
dismayed at developments, with one senior official noting, "This is

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something we never anticipated. I do not know what the prime
minister is thinking."

In the meantime, New Komeito Diet Affairs Committee Chairman Yoshio
Urushibara expressed hope for talks with the new LDP leadership,
noting, "The timing for a cabinet shuffle and for convening the
extraordinary Diet session are not linked."

A senior Upper House member of the LDP also welcomed the move,
noting, "Since things are not moving well under the present LDP
leadership, it would be better if the new leadership holds talks
with the New Komeito."

However, one senior LDP official said, "We will not let New Komeito
have its way. If the refueling operations in the Indian Ocean are
suspended, a diplomatic problem will occur." A number of LDP members
share this view.

An LDP source pointed out the importance of how the prime minister
deals with the situation, saying, "If the prime minister stumbles
over this issue, the New Komeito might decide to oust him."

9) New Komeito distancing itself from Prime Minister Fukuda;
concerned about possible uphill battle in Lower House election

YOMIURI (Page 4) (Excerpts)
July 31, 2008

The New Komeito, the junior coalition partner of the ruling Liberal
Democratic Party (LDP), has begun distancing itself from Prime
Minister Yasuo Fukuda, whose approval rates have continued to stay
low in the opinion polls. The party is concerned that the ruling
camp will inevitably face an uphill battle in the next House of
Representatives election. Some New Komeito lawmakers have called for
Fukuda to step down as prime minister. The New Komeito has been
pressing to have its views heard about the timing of the convening
of an extraordinary Diet session and the handling of a bill amending
the New Antiterrorism Special Measures Law (for refueling missions
in the Indian Ocean).

The LDP and New Komeito secretaries general yesterday discussed the
future political timetable. However, the two officials failed to
reach agreement on issue of the timing of the extra Diet session and
the passage of the new antiterrorism law, but the New Komeito was
willing to accept a cabinet shuffle which Fukuda is now
considering.

The New Antiterrorism Special Measures Law, which expires next
January, allows the Maritime Self-Defense Force (MSDF) to carry out
refueling operations in the Indian Ocean. Fukuda hopes to continue
the MSDF's refueling mission there. Based on Fukuda's intention, LDP
Secretary General Bunmei Ibuki has insisted that the extra Diet
session be opened in late August to allow time to pass the law by an
overriding vote in the Lower House. The New Komeito, however, has
been reluctant to take a revote and insists that the session be
convened in September.

New Komeito Diet Affairs Committee Chairman Yoshio Urushibara
yesterday told reporters: "I think we should not presuppose an
overriding vote in the Lower House."

The New Komeito and the religious sect Soka Gakkai, the New

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Komeito's main backer, have taken a cautious stance toward overseas
deployment of the Self-Defense Forces (SDF). A party member said:

"If we take an overriding vote on the antiterrorism legislation, the
Democratic Party of Japan (DPJ) and other opposition parties will
criticize us. As a result, the New Komeito will have to take all the
blame."

Since Junya Yano, former New Komeito chairman, has taken a legal
action against the Soka Gakkai, claiming damages, an LDP official
pointed out: "For fear of the possibility of Yano being summoned to
testify as a witness before the Diet, the New Komeito wants to
shorten the term of the extra Diet session."

The New Komeito had positively supported Fukuda's political stance,
such as a policy of placing importance on the average people. The
party is now changing its position toward Fukuda.

10) WTO talks collapse: Japan faces need for agricultural reform

TOKYO SHIMBUN (Page 9) (Excerpts)
July 31, 2008

Key unofficial ministerial talks of the new round of free trade
talks (Doha Round) under the World Trade Organization (WTO) ended in
failure, although a historic deal was in sight at one point.
Japanese farmers feel relieved because they would have been placed
at a disadvantageous business situation if an accord had been
struck. However, Japanese agriculture's "weakness" was underscored
in the talks.

A member of JA Hokkaido Agricultural Cooperative said: "We cannot
budge even an inch on such items as dairy products, sugar beet, and
adzuki beans. We welcome the breakdown of the talks." A JA Okinawa
Agricultural cooperative member commented: "Since there was a high
possibility that the sugar industry in the prefecture would suffer a
setback, we now feel relieved." A JA Gunma Agricultural Cooperative
member also said: "We will not face a crisis of an influx of cheap
tuberous roots of konjak from China for the time being."

Agricultural groups where farmers pool their products protected by
high tariffs all expressed their welcome for the breakdown of the
talks. If the talks had been concluded, Japan would have been
pressed to significantly lower tariffs on certain farm products and
Japanese products would have eventually been exposed to competition
from cheap imports.

The latest talks exposed a wide gap existing between the level of
liberalization being sought by many other countries and the present
state of Japanese agriculture. Japan's target for the number of
"sensitive products" to be exempted from sharp tariff cuts was
ignored in effect, and Japan was about to be forced to make a
substantial concession.

Mizuho Research Institute chief researcher Junichi Sugawara
commented:

"We should not be pleased with the preservation of the status quo
but must be aware of the need to reform agriculture by encouraging
newcomers and to increase full-time farmers in order to change the
current weak Japanese agricultural structure."


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11) Cabinet Office revises assessment in key economic index
downward

MAINICHI (Page 1) (Excerpts)
July 31, 2008

The Cabinet Office is expected to revise the overall economic
assessment in the diffusion index of economic indicators for June
due out on Aug. 6 downward to "deteriorating," showing a high
possibility that the economy is in a recession. The industrial
production index for June dropped by 2.0 PERCENT compared to the
previous month, and it is now certain that the coincident index will
also drop from the previous month. The assessment reflects these
negative factors. It is likely that the economic expansion that
began in February 2002, the longest postwar expansion, is now over
and that the economy is in a recession.

12) Bill related to consumer agency specifies government's
responsibility for protection of consumers

TOKYO SHIMBUN (Top Play) (Excerpts)
July 31, 2008

The government plans to submit to the next extraordinary Diet
session three bills related to a consumer agency, which it plans to
establish next fiscal year. Their full texts were revealed
yesterday. "A bill to prevent harm to consumers" specifies that the
central and local governments are responsible for preventing the
occurrence or expansion of damage to consumers. Under the law, if a
company does not follow an order issued by the government, for
instance, to recall harmful food products, to terminate a contract
that involves fraudulent practices, or to stop using dangerous
facilities, the company will be required to pay a fine of up to 100
million yen. The law mandates local governments concerned to
promptly inform the consumer agency if serious harm is done to
consumers.

The government aims to prevent any kind of harm to consumers under
the new legislation. As penalties, the bill stipulates a maximum
prison term of one year or a fine of up to one million yen. It
intends to severely punish companies unwilling to take measures to
prevent harm, regardless of the products or sales methods.

"A bill to set up a consumer agency" proposes establishing a
consumer policy committee in which consumers' opinions will be
reflected in administration. "A bill revising the Cabinet Office
Establishment Law" calls for making the post of minister of consumer
affairs permanent. The government also plans to hurriedly work out a
bill to place 29 ordinances related to consumer administration under
the jurisdiction of the consumer agency. It intends to adopt the
four bills at a cabinet meeting in early September.

13) U.S. military realignment still murky ahead

MAINICHI (Page 2) (Full)
July 31, 2008

The Defense Ministry has now decided to designate the city of Zama
in Kanagawa Prefecture as applicable to receive an incentive
subsidization that is reserved for certain municipalities across the
nation in return for their acceptance of the planned realignment of
U.S. forces in Japan. The Defense Ministry deems that Zama City,

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which has opposed the U.S. military's realignment, is now taking a
flexible position. The realignment subsidies, as part of the state's
"carrot and stick" policy, are to be paid out to all 39 base-hosting
municipalities. In the cases of some local governments, however,
their standards for accepting realignment plans are vague. The
government is therefore facing difficulties in negotiating with
those particular governments, so the future course of realignment
plans remains unclear.

Zama Mayor Katsuji Hoshino yesterday met with Defense Minister
Shigeru Ishiba at the ministry. In the meeting, the mayor accepted
the Defense Ministry's proposal of a plan yesterday to set up a
consultative body for the government and municipalities to discuss
such issues as alleviating local burdens. The mayor also told Ishiba
that the city has decided to dissolve its antibase council. He is to
retire in September, so he is believed to have calculated the right
timing for a softening of his attitude. The Defense Ministry will
now go through procedures to designate Zama eligible for subsidies,
citing that it has obtained the mayor's understanding to a certain
extent for the realignment.

The government will increase the amount of realignment incentive
subsidies according to the degree of local cooperation and will not
subsidize anti-realignment municipalities. The government decided at
first to forgo its designation of six municipalities. However, the
government later designated Nago City and Ginoza Village in Okinawa
Prefecture and Iwakuni City in Yamaguchi Prefecture. The government
has therefore decided informally to disburse a total of 6.1 billion
in the current fiscal year. Zama City was the only municipality yet
to be designated.

All municipalities are now falling into step with the planned U.S.
force realignment. The government's subsidization of municipalities
is preconditioned on their acceptance of realignment plans. However,
their standards are vague. "I have never asked the government to
give us money," Hoshino told reporters, adding that the government
should take measures on its own responsibility to alleviate local
burdens. Meanwhile, Nago City has also been designated for state
subsidization but is still asking the government to move the
relocation site of Futenma airfield into the sea. The government's
consultative body with Okinawa's prefectural and municipal
governments is now deadlocked over Futenma relocation. "The
effectiveness of subsidies will be limited in the end," a senor
official of the Defense Ministry noted.

14) Okinawa delegates ask opposition parties to oppose Futenma
relocation to Henoko

MAINICHI (Page 5) (Full)
July 31, 2008

The Okinawa prefectural assembly recently passed a resolution
opposing the planned relocation of the U.S. military's Futenma
airfield in the Okinawa prefectural city of Ginowan to a coastal
area of Camp Schwab, a U.S. military base in the Henoko district of
the island prefecture's northern coastal city of Nago. Meanwhile, a
delegation of Okinawa prefectural assembly members, led by Yonekichi
Shinzato from the Shamin-Goken Net party, called yesterday on four
opposition parties' executives, including Democratic Party of Japan
(Minshuto) Secretary General Yukio Hatoyama, and asked their parties
to oppose the planned construction of a new base at Henoko. Hatoyama
agreed with them, saying, "The government should find another

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SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 07//08

relocation site outside Okinawa Prefecture or outside Japan."

15) JCP Chairman Shii promises cooperation to Okinawa assembly
delegation in opposing the building of a new base and in scrapping
the medical services plan for the elderly

AKAHATA (Page 1) (Excerpt)
July 31, 2008

Japan Communist Party (JCP) Committee Chairman Kazuo Shii and other
party official met yesterday in the Diet building with a delegation
of representatives of opposition parties in the Okinawa Prefectural
Assembly. He stated his full support for the two requests of the
delegation: opposition to the building of a new U.S. military base
(in Okinawa), and the scrapping of the medical system set up for the
elderly. The delegation consisted of five assembly members.

16) DPJ to boycott MSDF bill

NIKKEI (Page 2) (Full)
July 31, 2008

The government plans to present legislative measures to the Diet at
its next extraordinary session, including the one for extending the
Antiterrorism Special Measures Law in order to continue the Maritime
Self-Defense Force's refueling mission in the Indian Ocean. In this
regard, Kenji Yamaoka, chair of the Democratic Party of Japan
(Minshuto) Diet Affairs Committee, delivered a speech yesterday in
the city of Oyama, Tochigi Prefecture, and said: "Even if the
censured prime minister tries to do something that is not for the
public good, we will not spend even a minute for deliberations." He
intimated that the DPJ would boycott Diet deliberations on the MSDF
bill if the ruling parties intend to take a second vote on the bill
in the House of Representatives after it is voted down in the House
of Councillors.

17) ASDF plans flight training to Beijing

NIKKEI (Page 2) (Full)
July 31, 2008

The government made a formal decision yesterday to use a U-4
multipurpose assistance plane of the Air Self-Defense Force, instead
of flying its own aircraft, for Prime Minister Yasuo Fukuda to visit
China to attend the opening ceremony of the Beijing Olympics. The
ASDF will fly a U-4 plane today from its Iruma base in Saitama
Prefecture to Beijing for day-trip flight training in preparation
for Fukuda's scheduled visit to China. This is the first time for
the ASDF to land its aircraft in China, except for government
aircraft.

18) Indonesian nurses, careworkers to arrive in Japan

MAINICHI (Page 2) (Abridged)
July 31, 2008

Japan and Indonesia have entered into an economic partnership
agreement (EPA), under which Japan is to accept Indonesian nurses
and careworkers. Indonesia will now send a total of 208 persons,
broken down into 104 nurses and 104 careworkers. There were a total
of 313 persons who wanted to work in Japan as nurses or careworkers.
However, there is a decrease of more than 100 persons in the total

TOKYO 00002089 013 OF 013

SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 07//08

number of Indonesian nurses and careworkers coming to Japan. Japan
initially planned to accept a total of 500 persons (200 nurses and
300 careworkers).

SCHIEFFER

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