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Cablegate: Japanese Morning Press Highlights 08/05/08

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UNCLAS SECTION 01 OF 08 TOKYO 002135

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 08/05/08

Index:

1) Fuji-Sankei poll: Fukuda Cabinet gets 7.6 point boost in support
rate to 29.3 PERCENT , attributed to bringing the popular Taro Aso
on board as party secretary general (Sankei)

Defense and security affairs:
2) Prime Minister Fukuda will ask U.S. to investigate leakage of
radiation from Navy sub that called at Sasebo in March (Yomiuri)
3) Protest rally in Sasebo against the port call by a Navy sub that
is the same type as the one that leaked minor radiation in March
(Akahata)
4) SDF overseas dispatches at a crossroads as the time limits
approach for Iraq, Afghanistan and the New Komeito is balking at
extensions (Tokyo Shimbun)

Political agenda:
5) Growing mood in the government, LDP favoring Diet dissolution
(Mainichi)
6) Fukuda trying to balance economic policy forces in the party by
appointing Hidenao Nakagawa, left out of the cabinet, to head
national strategy task force (Mainichi)
7) By ordering a comprehensive economic stimulus package, Prime
Minister Fukuda aims at buoying up his administration in reading for
a snap election (Yomiuri)
8) LDP executives greatly worried about the mountain of issues piled
up in the Diet when it reopens (Yomiuri)

9) What the New Komeito feared, the opposition plans to pursue
former executive Yano in the Diet over trouble with Soka Gakkai
sect, the party's chief promoter (Yomiuri)
10) LDP Secretary General Aso denies he made any deals with the
Prime Minister prior to his new appointment (Yomiuri)
11) Aso, known for his misspeaks, does it again by comparing the
Democratic Party of Japan to the WWII Nazis (Yomiuri)

12) Arrest papers being readied for Sea Shepherd's American
activists for allegedly stealing whale meat from Japanese whalers
(Sankei)

13) Survey of 121 major companies finds half convinced that the
country is already in a recession (Mainichi)

Index correction: (Morning Highlights August 4)

Hiroshima peace groups protest remark made by Ambassador Schieffer
about the dropping of atom bombs saved many more lives by ending the
war (Akahata)

Cabinet shuffle by Prime Minister Fukuda a shift in gears to face a
Lower House election, but it also symbolizes a change away from
reform line (Asahi)

Articles:

1) Poll: Cabinet support at 29.3 PERCENT , rebounds for first time,
possibly due to Aso

SANKEI (Page 1) (Abridged)
August 5, 2008

The Sankei Shimbun conducted a joint public opinion survey with Fuji

TOKYO 00002135 002 OF 008


News Network (FNN) on Aug. 2-3 after Prime Minister Yasuo Fukuda's
shuffle of his cabinet and his appointment of a new lineup of
executives for his ruling Liberal Democratic Party. The rate of
public support for the new Fukuda cabinet was 29.3 PERCENT , up 7.6
percentage points from the 21.7 PERCENT low in the last survey
taken July 12-13. The nonsupport rate was 51.5 PERCENT , down 9.7
points from the last survey. The public approval rating for the
Fukuda cabinet had been on the decline since its inauguration in
September last year. However, it rebounded for the first time.
Fukuda picked the popular Taro Aso for the post of LDP secretary
general. This appointment is believed to have had some effect.

In the breakdown of public support for political parties, the LDP
stood at 27.0 PERCENT , up 4.0 points from the last survey. The
leading opposition Democratic Party of Japan (Minshuto) was at 26.6
PERCENT , down 2.4 points from the last survey. The LDP outstripped
the DPJ for the first time in four months. When it comes to the
desirable form of government after the next election for the House
of Representatives, however, the proportion of those opting for a
DPJ-led coalition government (33.4 PERCENT ) topped that of those
choosing an LDP-led one (19.2 PERCENT ) as in the previous surveys.
The most common choice was a grand coalition of the LDP and the DPJ
at 39.4 PERCENT .

2) Japan to ask U.S. to investigate nuke sub radiation leak: Fukuda

YOMIURI (Page 4) (Full)
August 5, 2008

A U.S. Navy nuclear-powered submarine was recently found to have
leaked a small amount of radioactivity at the U.S. Navy's Sasebo
base in Nagasaki Prefecture. On this issue, Prime Minister Fukuda
said: "Even though it's a small amount, we must seriously take the
fact that radiation leaked. We will ask the United States to look
into the cause of that radioactive leak, of course." Fukuda was
replying to a question from reporters at his office yesterday
evening.

Asked about the Foreign Ministry's belated report of the incident to
the prime minister's office, Fukuda criticized the Ministry, saying,
"Radioactive leakage-regardless of its scale-must be immediately
reported (to the prime minister's office) and needs to be made known
to the public." He added, "I have told the Foreign Ministry to take
appropriate action, including a public announcement."

3) U.S. nuclear-powered submarine of same type as one that leaked
radiation enters Sasebo; Residents stage protest

AKAHATA (Page 1) (Excerpts)
August 5, 2008

The USS La Jolla, a nuclear-powered fast attack submarine, entered
Sasebo port, Nagasaki Prefecture, yesterday morning. The La Jolla's
port call follows the U.S. government's admission three days ago
that the USS Houston, a nuclear-powered submarine of the same model,
leaked radiation.

Some 20 members of the Sasebo Council against A&H Bombs and the
Nihon Heiwaiinkai (Japan Peace Council) staged an emergency rally
against the La Jolla's port call starting at 9 o'clock in the
morning.


TOKYO 00002135 003 OF 008


The rally's representative Chiaki Yamashita of the Sasebo Council
against A&H Bombs called on the public, saying: "With the collapse
of the myth that nuclear-powered vessels are safe, fears are growing
among residents. Let us expand the circle of protest against the
U.S. military, whose submarine has entered Sasebo in defiance of
local fears, and the Japanese government that has given a nod to the
sub's port call."

4) SDF dispatch at crossroads

TOKYO SHIMBUN (Page 2) (Abridged)
August 5, 2008

Japan's assistance to Afghanistan and Iraq-both still remaining in a
state of confusion-is now at a crossroads. New Komeito, the ruling
Liberal Democratic Party's coalition partner, is also calling for
the government to recall the Self-Defense Forces. Meanwhile, Japan,
should it pull out, may give the impression that Japan backpedaled
on its international contributions. Prime Minister Fukuda, who has
just shuffled his cabinet, is now being urged to make a decision.

In Japan's assistance to Afghanistan, the Maritime Self-Defense
Force has been refueling foreign naval vessels in the Indian Ocean
to deter terrorism under a newly enacted law for special measures
against terrorism. The law is set to expire in January next year.
The government and the LDP are going to revise the law at the next
extraordinary Diet session for the MSDF's continued refueling
mission there. The LDP wants to get a bill for that purpose through
the Diet even by taking a second vote in the House of
Representatives (since the planned legislation, after its passage
through the House of Representatives, would be voted down in the
opposition-controlled House of Councillors).

However, New Komeito remains cautious about extending the MSDF's
Indian Ocean refueling mission. New Komeito fears that the ruling
coalition, if it rams the bill through the Diet in a second vote,
would be under fire from public opinion. Meanwhile, New Komeito
stakes its fate on next year's election for the Tokyo metropolitan
assembly. The party is therefore worried about a negative impact on
that scheduled metropolitan event and also on a general election for
the House of Representatives after its possible dissolution. "It's
all right to recall the MSDF squadron one time," a New Komeito
executive said.

5) Anticipation of early Lower House dissolution growing in
government, LDP

MAINICHI (Page 5) (Excerpts)
August 5, 2008

Following the appointments of cabinet members and Liberal Democratic
Party executives in the shuffle of the Fukuda cabinet, an increasing
number of people in the government and the LDP have begun to make
remarks regarding an early dissolution of the House of
Representatives for a snap election. Seeing the appointment of Taro
Aso as secretary general, some LDP members now think that Prime
Minister Yasuo Fukuda has arranged the lineup in preparation for the
next Lower House election. Among them, anticipation for an early
dissolution is prevailing. But others have made statements intended
to tamp down such talk.

On the dissolution of the Lower House, the remarks of Election

TOKYO 00002135 004 OF 008


Committee Chairman Makoto Koga have drawn much attention. Up until
the cabinet shuffle, Koga had asserted that the Lower House should
be dissolved later this year or early next year, in accordance with
the New Komeito's desire. In a speech on Aug. 3, however, Koga said:
"If the Lower House is dissolved under the current situation, the
outcome may be disastrous. We need time to get the people to realize
that the cabinet will put them at ease, as the prime minister has
said." Koga then said that the dissolution should come sometime very
close to the expiration of the Lower House members' terms.

A member of the Koga faction explained: "Since the New Komeito has
begun to make one request after another over the timing for opening
the next extraordinary Diet session and such issues as extending the
new antiterrorism special measures law, Mr. Koga probably tried to
contain its moves." But an LDP member speculated: "An early
dissolution would make his rival, Mr. Aso, more influential. Mr.
Koga might be aiming to avoid such a situation."

Appearing on a TV program on Aug. 2, Aso said: "The dissolution of
the Lower House could occur anytime." Executive Council Chairman
Takashi Sasagawa also emphasized on the 3rd, upon indicating that
the next extraordinary Diet session would last for about three
months, "The key point is how to persuade the people during the
three months of the session. If public support for the government
soars, the Lower House could be dissolved earlier." He defined the
upcoming extraordinary Diet session as an election-strategy-oriented
session.

6) Fukuda appoints Hidenao Nakagawa as effective head of National
Strategy Office

MAINICHI (Page 5) (Full)
August 5, 2008

The government decided yesterday to appoint former Secretary General
Hidenao Nakagawa as deputy head of the Liberal Democratic Party's
National Strategy Office, headed by Prime Minister Yasuo Fukuda.
Nakagawa is a core member of a group calling for giving priority to
economic growth. In the shuffled cabinet, however, members of a
group insisting on the need for fiscal reconstruction, eyeing tax
hikes, have been picked for cabinet or party executive posts, such
as State Minister in Charge of Economic and Fiscal Policy Kaoru
Yosano. Observers believe that Fukuda aims at keeping the party in
balance by appointing Nakagawa as the effective head of the office,
which is called "the second Policy Research Council."

Fukuda called Nakagawa in to his official residence yesterday and
said: "Some say that the government is retreating from the reform
line, but that is not true. I want you to carry through reforms."

Nakagawa replied: "A reform vision from a medium- to long-term
perspective will become our party's policy manifesto for the next
House of Representatives election. From this standpoint, I accept
your offer," indicating his eagerness to hold on to the reform
policy.

The National Strategy Office under the party president was created
in 2001 under the Koizumi administration, tasked with drawing up a
medium- to long-term national vision.

Taking responsibility for the crushing defeat in the House of
Councillors election in July 2007, Nakagawa resigned as secretary

TOKYO 00002135 005 OF 008


general, but he has continued to demonstrate his influence in
discussions in the party on civil service reform and other issues as
an advisor to the said panel. By assuming the post of deputy head,
Nakagawa might be aiming to make the panel a base for advocates of
economic growth to recover from the setback.

7) Comprehensive economic stimulus package: Prime Minister aims at
buoying up administration with eye on Lower House election: Focus is
on when to submit supplementary budget bill

YOMIURI (Page 4) (Excerpts)
August 5, 2008

The shuffled cabinet got under way on August 4. Prime Minister
Fukuda immediately started compiling a comprehensive economic
stimulus package. He aims at put forward a clearer stance of giving
consideration to people's lives with eye on the next Lower House
election. The government and the ruling parties will also look into
submitting a supplementary budget bill for fiscal 2008 to the next
extraordinary Diet session. However, since the timing of submitting
such a bill to the Diet is intertwined with the issue of when to
dissolve the Lower House for a snap election, coordination of views
will likely encounter complications.

State Minister for Economic and Fiscal Policy Yosano on the morning
of the 4th met with the prime minister at the Kantei. After the
meeting, he told reporters: "The steep rise in crude oil prices has
triggered an economic slowdown. Its impact has spread to various
businesses, including small- and medium-size companies and the
financial services sector. The prime minister has ordered me to
compile a package of measures dealing with the economy as a whole."

The catchphrase of the shuffled cabinet is the "peace of mind
realization cabinet." It seems that the prime minister wants to
secure stable support form the public, by coming up with economic
stimulus measures without a pause, capitalizing on the improved
approval rating of the cabinet due to the effect of the shuffling.

The package, which is to be compiled possibly before the end of the
week, will likely include measures to expand assistance to small-
and medium-size businesses and the agriculture, forestry and
fisheries sector, which are suffering from the steep rise in crude
oil prices, and measures to promote the use of energy-saving
technologies.

Some ruling party members are concerned that such measures could be
criticized as for scattering about pork-barrel largesse. However,
many are welcoming the government's move. The prevailing view is
that a Lower House election should come after the enactment of a
supplementary budget bill for fiscal 2008 and the compilation of an
economic stimulus package. Regarding the size of a supplementary
budget, some are calling for a drastic scale topping 1 trillion
yen.

However, a consensus on when to submit a supplementary budget bill
to the Diet has yet to be reached.

The New Komeito's view is that it would be desirable to dissolve the
Lower House around the turn of the year. Reflecting this view, some
have suggested that the Lower House should be dissolved either in
the final stage of the next extraordinary Diet session or right
after the handling of a supplementary budget bill at the outset of

TOKYO 00002135 006 OF 008


the regular Diet session next year. On the other hand, others have
pointed out, with a possible dissolution of the Lower House next
spring or later after the compilation of the fiscal 2009 budget in
mind, that it would be better not to link a supplementary budget
bill to a dissolution of the Lower House.

8) New LDP leadership facing unsettling conditions: Mountain of
challenges, including extraordinary Diet session, unity

YOMIURI (Page 4) (Excerpts)
August 5, 2008

The new leadership of the Liberal Democratic Party (LDP) yesterday,
August 4, held a regular meeting with the government. The LDP is
determined to rebuild the party's strength, spurred by Secretary
General Aso's popularity. However, there is a mountain of challenges
to tackle, including coordination of views with the New Komeito
regarding when to convene the next extraordinary Diet session. The
leadership itself has yet to reconstruct its unity, which has been
shaken in the aftereffects of the trouble that occurred over the
selection of party executives.

Aso on the 4th attended a meeting between the government and the
LDP, which was held for the first time under the new administration.
On his appointment, he visited former Prime Minister Mori of the LDP
and Upper House President Eda to pay his respects.

The leadership is expected to confer on how to manage the next
extraordinary Diet session, a pressing issue, at a meeting of
secretaries general and Diet Affairs Committee chairmen of the LDP
and the New Komeito. Aso wants to reach a decision on when to
convene the session before the end of the week.

Aso also intends to enact a bill amending the New Antiterrorism
Special Measures Law, which will become the focus of attention in
the next extraordinary Diet session, even by taking a revote in the
Lower House. However, the New Komeito still remains cautious about
the issue, with Yoshio Urushibara, the party's Diet Affairs
Committee chairman, telling reporters on the 4th, "It is
questionable to set a date to convene the extraordinary Diet session
in a manner that makes taking a revote on the bill amending the New
Antiterrorism Special Measure Law a foregone conclusion." Aso's
ability to coordinate with New Komeito will soon be tested.

9) Kamei set to pursue issue involving former New Komeito head Yano
in extraordinary Diet session

YOMIURI (Page 4) (Full)
August 5, 2008

In an interview with the Yomiuri Shimbun yesterday, Shizuka Kamei,
deputy president of the People's New Party, expressed his intention
to pursue the issue of former New Komeito leader Junya Yano filing a
damage suit against Soka Gakkai for violating his human rights by
threatening him and obstructing his freedom of speech. Kamei said:
"This issue naturally should be taken up in the extraordinary Diet
session. Since he claimed that his freedom of speech had been
obstructed, it is necessary to question him about the circumstances,
from the viewpoint of democracy." He indicated he would demand that
Yano be summoned as an unsworn witness.

Asked about the timing for a general election, Kamei indicated an

TOKYO 00002135 007 OF 008


early dissolution of the House of Representatives.

10) Aso denies "secret deal"

YOMIURI (Page 4) (Full)
August 5, 2008

There is a rumor going around that when Secretary General Aso of the
Liberal Democratic Party (LDP) accepted the post, he made a secret
deal with Prime Minister Fukuda on a transfer of power. Aso on a
Fuji TV talk show on August 4 denied the rumor, noting: "I thought I
would not be much of a man if I had declined the offer solely for my
own convenience. You never know what will happen in the future. Even
if something happens, a party presidential election must be carried
out."

In this connection, former Prime Minister Mori of the LDP met with
Finance Minister Ibuki and Lower House member Muneo Suzuki, head of
the New Party Daichi. During the meeting, Mori reportedly said,
"Even if there were various exchanges between the prime minister and
Mr. Aso, the authority left exclusively in the hands of the prime
minister (the right to dissolve the Lower House) will never be
restricted."

11) Aso's remarks likening DPJ to Nazis draws fire

YOMIURI (Page 2) (Abridged slightly)
August 5, 2008

LDP Secretary General Taro Aso paid a courtesy call on Upper House
President Satsuki Eda yesterday and applied pressure on the
Democratic Party of Japan by citing Nazi Germany. Aso's comment is
drawing fire from the DPJ.

Aso, in his meeting with Eda in the Diet building, said: "Nazi
Germany, too, once said, 'Let us (steer the administration).'"

In response, Eda said: "I don't mean to contradict you, but it's not
about the DPJ. The question is which the general public prefers --
the LDP or the DPJ.

DPJ Secretary General Yukio Hatoyama expressed strong displeasure to
reporters in Tokyo last night, saying: "The remark could give the
impression that the DPJ would undertake oppressive policies. What he
said is intolerable even as an analogy. We demand that he retract
his remark."

Aso explained to the press corps last night: "What would happen if
(the opposition-controlled) Upper House does not carry out
deliberations? What happened as a result of Germany saying in the
past 'let the Nazi run the administration'? With such a historical
event in mind, I just discussed the importance of Diet
deliberations."

12) Investigative authorities to seek arrest warrants for
environmental activists, including Americans, possibly today for
obstructing Japanese whaler

SANKEI (Top play) (Excerpts)
August 5, 2008

Japanese investigative authorities decided yesterday to press

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charges against several members, including Americans, of the U.S.'
Sea Shepherd (SS) Conservation Society for interfering with a
Japanese research whaler in the line of duty. Investigative
authorities will seek arrest warrants as early as today. The
Japanese government has concluded that it is necessary to take a
resolute stance toward the international community in order also to
prevent acts of sabotage, which have been uncontrolled due to
difficulty building cases.

Several SS members are suspected to have obstructed the activities
of the Japanese whaling research mother-ship Nisshin Maru that was
navigating in the Southern Ocean in February 2007 and March 2008 by
hurling bottles containing a chemical agent emitting a pungent odor
that seemed butyric acid at it form the SS protest vessel. Three
crewmembers sustained minor injuries in the March 3 sabotage.

Taking the situation seriously, investigative authorities have
analyzed videos taken by crewmembers and expedited efforts to
identify the suspects by requesting investigative cooperation of
countries concerned, including the government of Australia where the
SS is based.

Now that several individuals, including Americans, have been
identified as suspects, investigative authorities have decided to
seek arrest warrants for them.

Nevertheless, difficulty is expected in seizing the suspects. That
is because chances are slim that the suspects will enter Japan and
also because Japan has to seek the transfer of custody of suspects
of countries concerned under the Convention for the Suppression of
Unlawful Act against Vessels at Sea (SUA), with the exception of the
United States with which Japan has concluded an extradition treaty.

13) Mainichi Shimbun poll: 50 PERCENT of respondents reply the
economy is already in grip of recession; Pessimistic view spreads

MAINICHI (Page 1) (Excerpt)
August 5, 2008

The Mainichi Shimbun conducted a poll on the economy on 121 leading
companies. The survey found that the business confidence of the
surveyed companies has rapidly deteriorated due to concern about the
steep rise in raw material prices and the U.S. economy.
Approximately 50 PERCENT of the respondents or 60 companies replied
that the Japanese economy, which has continued the longest expansion
after the war, has taken a downward turn as of the first half of
this year, indicating that a pessimistic view is spreading. As to
when the economy will enter a recessionary phase, 65 PERCENT of
respondents replied "before the end of the year, combining 15
PERCENT , which replied "the second half of 2008, topping 47 PERCENT
marked in the previous survey carried out in April.

SCHIEFFER

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