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Cablegate: Japanese Morning Press Highlights 09/02/08

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UNCLAS SECTION 01 OF 13 TOKYO 002380

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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 09/02/08

Index:

1) Top headlines
2) Editorials

Prime Minister Fukuda's resignation:
3) Prime Minister Fukuda suddenly resigns his post, leaving
likelihood now of Diet dissolution later this year; Aso the
frontrunner to replace him (Tokyo Shimbun)
4) Fukuda during his one year tenure lacked the ability to
communicate with the public (Yomiuri)
5) Coordination starts to hold LDP presidential election to replace
Fukuda on Sept. 21 (Sankei)
6) Strong expectation now of an early Diet dissolution and of LDP
Secretary General Aso picking up the mantle, but MSDF refueling bill
is now in deep trouble (Asahi)
7) Convening of the extraordinary Diet session could now be greatly
delayed (Tokyo Shimbun)
8) LDP presidential election: Hopes growing for Aso's popularity
(Asahi)
9) Yuriko Koike's name also being mentioned as a candidate to
succeed Fukuda as prime minister (Yomiuri)
10) Opposition parties all blast Fukuda's sudden resignation as
"irresponsible" (Yomiuri)
11) With Fukuda suddenly quitting his prime minister's post, growing
anxiety in Washington about the future of the U.S.-Japan alliance
(Asahi)
12) Fukuda's stepping down creates a foreign-policy vacuum (Nikkei)

13) No prospect in sight for an early start of North Korea's
reinvestigation of the abduction issue (Asahi)

Opinion polls:
14) Nikkei poll prior to Fukuda resignation: Cabinet support rate
plunges 9 points to 29 PERCENT , with non-support rate soaring 14
points to 63 PERCENT (Nikkei)
15) Asahi poll: Fukuda Cabinet support rate stays low at 25 PERCENT
, non-support rate the same at 55 PERCENT (Asahi)

16) Ichiro Ozawa declares candidacy for 3rd term as DPJ presidency,
vowing to "topple the LDP-Komeito government" (Asahi)

17) House Speaker Pelosi, visiting Japan for G-8 meeting in
Hiroshima, meets Lower House Speaker Kono, asks for extension of
MSDF mission in Indian Ocean (Asahi)

18) MSDF postpones naval exercise with Russia due to the Georgia
dispute (Yomiuri)

Articles:

1) TOP HEADLINES

All newspapers:
Prime Minister Fukuda announces resignation

2) EDITORIALS

Asahi:
(1) Prime Minister Fukuda's resignation: Lower House should be
dissolved as early as possible to correct politics


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Mainichi:
(1) Fukuda announces resignation: Another irresponsible abandonment
of administration; Next premier should immediately dissolve Lower
House

Yomiuri:
(1) Fukuda's resignation: In order to implement policies, strong
cabinet lineup should be set up

Nikkei:
(1) Fukuda government reaches dead end as it was unable to come up
with strategy for Lower House dissolution

Sankei:
(1) Fukuda announces resignation: Prevent political vacuum and
create strong administration

Tokyo Shimbun:
(1) Fukuda announces resignation: Two consecutive prime ministers
give up jobs
(2) Reelection of Ozawa to third term as DPJ president: Ozawa must
show new policy vision for taking political helm

Akahata:
(1) Fukuda's resignation: LDP-New Komeito politics reaches impasse

3) Prime Minister Fukuda to resign; possibility of Lower House
dissolution before year's end increases; Aso a likely successor

TOKYO SHIMBUN (Top Play) (Full)
September 2, 2008

Prime Minister Yasuo Fukuda last night abruptly held a press
conference and announced that he had decided to step down after
judging that policies should be realized under a new lineup.
Although the 72-year-old Fukuda shuffled his cabinet in August, he
was unable to lift his approval ratings, which remained low. He was
then forced to resign as prime minister just 11 months after taking
office late last September. The ruling Liberal Democratic Party
(LDP) will have to hurriedly carry out a presidential election. LDP
Secretary General Taro Aso, who is regarded as a likely candidate to
replace Fukuda, expressed in the early hours of this morning his
strong desire to run in the race. Given that, chances are now high
that a dissolution of the House of Representatives and a general
election will be carried out before the end of the year.

Fukuda cited the difficulty of his management of the politically
divided Diet and his cabinet's slump in the polls as reasons for his
decision to resign. He stated:

"As long as I remain in office, the opposition will prevent me from
smoothly managing the Diet. There may be no change in the situation
even under a new government. But in my case, there are various
problems such as the cabinet support rating."

Asked when he had decided to step down, Fukuda said: "I made a final
decision late last week." Asked about his announcement to quit
office only one month after the cabinet shakeup, Fukuda sought
understanding from the press, saying:

"The new cabinet was able to come up with an economic stimulus
package. So, I thought that it would be the best time for me to

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resign now so that a political vacuum won't be created."

Fukuda became the 22nd LDP president, defeating Aso in the party's
leadership race in September 2007 conducted following the abrupt
resignation of his predecessor Shinzo Abe. Fukuda was elected the
91st prime minister on Sept. 25, 2007. He was the oldest son of the
late Prime Minister Takeo Fukuda. It was the first time in Japan's
history that a father and son became prime minister.

In an attempt to put an end to the divided Diet, Fukuda suggested
last November the idea of creating a "grand coalition" to Ichiro
Ozawa, president of the main opposition Democratic Party of Japan
(DPJ). Ozawa, however, turned down his proposal. The ruling
coalition was unable to get cooperation on important bills from the
largest opposition party, which repeatedly disapproved the
government's nominations for a governor of the Bank of Japan.
Therefore, the ruling camp had no choice but to use two-thirds
overriding votes in the Lower House in order to enact such bills as
one to continue the Maritime Self-Defense Force's refueling
operation in the Indian Ocean, as well as measures to reinstate
provisional taxes, including a gasoline tax.

After shuffling his cabinet, Fukuda expressed his intention to put
his all energy into creating a consumer affairs agency and compiling
an economic stimulus package, but a rift surfaced between him and
the New Komeito, the LDP's coalition partner, over when to open the
next extraordinary Diet session. Also with the discovery of
Agriculture, Forestry and Fisheries Ministry Seiichi Ota's office
expense problem, uncertainty was looming over Fukuda's management of
his administration.

4) Fukuda steps down: Lack of ability to send message to people,
"negative legacies" from Koizumi administration seal premier's fate

YOMIURI (Page 4) (Excerpts)
September 2, 2008

Prime Minister Fukuda put an end to his "cabinet launched with its
back to the wall" with an abrupt announcement of his resignation.
Fukuda continued to manage the government that gave priority to
realizing policy goals under the motto of "conducting state affairs
from the people's viewpoint", but he was not able to send a
clear-cut message speedily. He was also pressed with the "negative
legacies left by the Koizumi and Abe administrations," such as the
pension problem. As a result, he was unable to win a satisfactory
evaluation from the people.

Fukuda proposed a plan to create a consumer agency in fiscal 2009 as
a measure to strengthen governance to benefit consumers under the
slogan of "pursuing people-oriented administrative and fiscal
reform." He also addressed the challenge of freeing up road revenues
starting in fiscal 2009. On the diplomatic front, Fukuda devoted
himself to upgrading Asia policy, including relations with China. In
the Hokkaido Toyako Summit in July, he succeeded in bringing about
an agreement on a plan to halve greenhouse gas emissions by 2050 as
a long-term global goal.

Despite such efforts, public support for his cabinet remained low.
One of the main reasons for it was his lack of ability to send a
message to the people.

Fukuda dislikes performances. He continued to silently do his duty,

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calling his effort to deal with policy tasks "a silent revolution."
An aide to Fukuda said last night: "The prime minister had said that
he would not take the same stance as the Koizumi administration in
conveying his views to the public. We regretted to see that he was
unable to properly relay his views."

The government was also slow to deal with pending issues, dashing
the expectations harbored by those close to him. When the government
announced a plan to equally compensate all hepatitis C patients in a
lawsuit later last year, some claimed that the political judgment
came too slow as a result of priority given to legal procedures. On
the occasion of the earlier cabinet shuffle, as well, since the
prime minister did not easily reveal his true intentions, many in
the ruling camp expressed their frustration.

5) Choosing post-Fukuda prime ministerial candidate a chaotic
situation: Coordination under way with possibility of setting LDP
presidential election date for September 21

SANKEI (Page 2) (Abridged slightly)
September 2, 2008

Following Prime Minister Fukuda's announcement of his decision to
step down from the post, the Liberal Democratic Party (LDP) launched
coordination with the possibility of officially announcing the
holding of a presidential election to choose the next president on
September 8 and holding the election on the 21st. The LDP aims at
spurring public interest in the election, by holding its
presidential election on the same day as the selection of the
president of the Democratic Party of Japan (DPJ or Minshuto). The
party election board will formally set the date for the presidential
election on the 2nd. Secretary General Taro Aso has already been
tipped as a possible successor to Fukuda. There is also the
possibility of former Defense Minister Yuriko Koike and Chief
Cabinet Secretary Nobutaka Machimura declaring their candidacies.
The selection of the successor to Fukuda is likely to be a chaotic
situation.

The LDP rules on the official selection of its president stipulate
that if its president resigns suddenly, a presidential election must
be held. In cases of an emergency, the president can be selected at
a joint plenary meeting of members of both houses of the Diet
instead of at a party convention. A presidential election will
likely take place this time.

In order for a potential candidate to be eligible to run in an LDP
presidential election, he or she needs to be recommended by 20
lawmakers belonging to the LDP, excepting oneself. The present 387
lawmakers, excluding Lower House Speaker Yohei Kono and Vice
President of the Upper House Akiko Santo, and local chapters will
take part in the election. Votes cast by members of each chapter and
its friends will be allocated to each relevant candidate. If the
results of the voting find that there is no candidate who has won a
majority, the top two candidates would square off against each other
in the runoff taken part by lawmakers.

Aso, whose name recognition among the public is high, will be the
center of the attention in the LDP presidential election to choose a
successor to the prime minister.

Many New Komeito members are welcoming Aso as the next prime
minister. However, the party is not unanimously supporting him with

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one mid-ranking member saying, "Even if Mr. Aso succeeds Mr. Fukuda,
we would still find the next general election tough." Some New
Komeito members are recommending Koike or others as rival candidates
to Aso. The outcome of the short-term runoff is unpredictable.

6) Fukuda's resignation may affect extension of refueling mission in
Indian Ocean

ASAHI (Page 3) (Excerpt)
September 2, 2008

Following Prime Minister Fukuda's announcement of his resignation,
it has become uncertain whether Japan will be able to extend the
Maritime Self-Defense Force's refueling mission in the Indian Ocean.
Fukuda was said to be determined to resort to a revote in the House
of Representatives. The current law endorsing the mission is to
expire in January. Unless the law is extended, the mission will be
suspended. In such a case, Japan will fail to meet the prime
minister's slogan of Japan being a "peace-cooperation state" and may
disappoint Western countries.

7) Long delay in convening extraordinary Diet session likely, as LDP
will hold presidential election before end of month

TOKYO SHIMBUN (Page 1) (Excerpts)
September 2, 2008

Following Prime Minister Fukuda's (president of the Liberal
Democratic Party) announcement of his decision to step down from the
post, the LDP will hold a presidential election before the end of
September. The process of choosing a successor to the prime minister
and the LDP president will likely be moved forward with the focus of
attention on Secretary General Taro Aso, whom many party members
support.

Since this is going to be the third replacement of a prime minister
without a Lower House election, following the replacements of
Junichiro Koizumi and Shinzo Abe since the last dissolution of the
Diet in September 2005 over the issue of postal privatization, there
is a growing possibility of the Lower House being dissolved for a
snap election before the end of the year under the new prime
minister.

Following the prime minister's announcement, the LDP decided to
leave the setting of a date for a presidential election and the
choosing of a method of voting to the party election board, chaired
by Hideo Usui, to work out. The party election board is expected to
hold a meeting on the afternoon of September 2. Concerning the
voting method, there is the issue of whether in addition to
lawmakers there should be a vote by party members by prefecture,
each of which gets three votes. The LDP intends to leave the matter
to each prefecture's local chapter to work out.

Once the new president is elected, there will be a Diet nomination
for prime minister in both Diet chambers at the outset of the fall
extraordinary Diet session. The new LDP president is set to be
elected as the 92nd prime minister by a majority vote of members of
the LDP and the New Komeito, which hold a majority in the Lower
House.

The extraordinary Diet session was originally scheduled to be
convened on the 12th. However, the timetable will likely be

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extensively delayed due to the LDP presidential election.

8) LDP presidential election: Hopes growing for Aso's popularity

ASAHI (Page 3) (Excerpts)
September 2, 2008

Following Prime Minister Fukuda's sudden announcement of his
decision to step down, the political situation has become fluid.
Secretary General Taro Aso is the frontrunner in the presidential
election, and the focus of attention is on who will stand against
him. The opening day of the next extraordinary Diet session is set
for Sept. 12, but the date is likely to be delayed to later
September. The new prime minister to be appointed in the upcoming
Diet session will have to engage in heated Diet debate between the
ruling and opposition camps. The possibility is also growing
stronger that the new prime minister will be pressed to dissolve the
House of Representatives early next year or later this year.

The successor to Fukuda must be the "face" of the Liberal Democratic
Party, because the next Lower House election will certainly be held
under the next prime minister. Aso indicated a willingness to run in
the presidential election last night. In the past three presidential
races, Aso announced his candidacy. Last year, Aso was defeated by
Fukuda, but he won more votes from party members around the nation
than Fukuda.

Former Prime Minister Mori, who supports Fukuda, said in mid-August:
"We must make use of Mr. Aso's popularity. Many LDP members hope
that Aso will be the next prime minister."

Even so, when Aso accepted the post of secretary general on Aug. 1,
the rumor circulated that Fukuda had promised to Aso to smoothly
transfer the premiership to him. Given this, many LDP members do not
want a presidential election without a formal vote. Parliamentary
Secretary for the MEXT minister Hagiuda stressed: "We want to select
the next prime minister after thorough and open discussion within
the party on policies."

9) Aso to run for LDP presidential race; Name of Koike also
mentioned

YOMIURI (Page 3) (Excerpts)
September 2, 2008

Secretary General Aso has already expressed his intent to run in the
Liberal Democratic Party presidential election, following Prime
Minister Fukuda's resignation.

At party headquarters early this morning, Aso said, "I must consider
myself as an appropriated candidate." He indicated he would decide
to run in the presidential race today. Aso has already conveyed his
intention to former Prime Minister Mori. The Aso faction will call a
meeting this morning to start preparations for the presidential
race.

There are voices also expecting former Defense Minister Yuriko
Koike, who is close to the LDP's Hidenao Nakagawa, to run for the
office. Although she said late last night that she was surprised by
the resignation, she did not reveal how she would respond to the
presidential election.


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10) Opposition parties criticize Fukuda's resignation as
irresponsible

YOMIURI (Page 4) (Excerpts)
September 2, 2008

Prime Minister Fukuda's abrupt announcement last night of his
decision to step down sent a shock wave across the ruling and
opposition camps.

Liberal Democratic Party (LDP) Caucus in the House of Councillors
Chairman Otsuji lamented: "I cannot be convinced by it and cannot
understand it. I wanted him to do his best and fall on the
battlefield." A senior LDP member surmised: "He probably lost
confidence in being able to use override votes in the upcoming
extraordinary Diet session.

New Komeito President Ota commented: "I think that he came up with
that judgment after thorough thought. Since he was saying that he
would not allow a political vacuum to be created and would deal with
difficult tasks under a new system, I would like to deal with the
tasks from tomorrow while taking such words by the prime minister
heavily."

With the prime minister's resignation, some anticipate that it has
become more likely that the House of Representatives will be
dissolved this year.

An LDP source said: "A party presidential election is held, and then
a Lower House election may take place while the new prime minister
is still fresh."

But former Secretary General Koichi Kato remarked: "The sudden
resignation of two successive prime ministers will inevitably make
(the people) feel they are irresponsible. The prime minister's
resignation is a serious blow (to the LDP)."

All opposition parties lashed out at the prime minister's abrupt
resignation.

Democratic Party of Japan (DPJ) Deputy President Kan emphasized:

"Since the past two administrations, the Fukuda and the former Abe
administrations, gave up their work halfway through, the coalition
of the LDP and the new Komeito has proved that it cannot assume
responsibility for the people. In order to establish a government
that is responsible for the people as soon as possible, the Lower
House should be dissolved for a snap election. We are determined to
form a government led by the DPJ."

Secretary General Hatoyama commented:

"The other side diverts responsibility onto the DPJ, but the LDP was
unable to decide on the opening date and the duration of the next
Diet session without a hitch due to awkward relations with the New
Komeito. Moreover, the LDP had to accept the income tax reduction
scheme, though the prime minister had opposed it. Depressed by the
New Komeito's control, the prime minister might have felt things
were hopeless."

Japanese Communist Party Chairman Shii pointed out:


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"The Fukuda administration, following the former Abe one, left its
work halfway. This shows that LDP-New Komeito politics has reached
an impasse and that politics is now in a state of dismantlement."

Social Democratic Party of Japan President Fukushima said:

"The LDP threw out Prime Minister Fukuda for the sake of the next
Lower House election, while the prime minister abandoned his duty
halfway through. Neither of them thinks of the people. This was a
cabinet that abandoned the people."

11) U.S. concerned about future course of alliance with Japan

ASAHI (Page 8) (Full)
September 2, 2008

Prime Minister Yasuo Fukuda's abrupt announcement has taken major
powers by surprise. His decision has cast a pall over a
Japan-China-South Korea summit planned for later this month, as well
as over the promised reinvestigation into Japanese nationals by
North Korea. There is concern in the United States that the
Japan-U.S. alliance might even become destabilized.

Yoichi Kato, Bloomington, Minnesota

Prime Minister Fukuda's abrupt announcement to step down shocked the
United States. There have been no signs of Fukuda's resignation on
the backdrop of intergovernmental coordination for a visit to the
United States by Defense Minister Yoshimasa Hayashi. A U.S.
government official said: "There were a series of events leading up
to the resignation of former Prime Minister Abe. This time, it was a
total surprise."

Center for Strategic and International Studies Japanese Affairs
Director and former National Security Council Asian Affairs Director
Michael Green said: "President Bush has had a favorable impression
of Prime Minister Fukuda. The question is what will happen to the
administration after this one leaves office."

Will the country be able to install an administration led by someone
who is more forceful than Prime Minister Fukuda? It would be good if
the divided Diet were to be dissolved as a result of political
realignment. But in the event a political situation emerges where
the successive administrations end up just as short-lived, the
Japan-U.S. alliance, which already seems adrift, might lose its
stability, according to Green.

According to a person concerned, discontent is growing in the U.S.
government, especially in the Department of Defense, about a lack of
prospects for Japan's assistance for Afghanistan and for the
realignment of U.S. forces in Japan. People are watching closely how
Prime Minister Fukuda's resignation will affect the situation,
according to the source.

12) Diplomatic vacuum inevitable; North Korea policy unclear

NIKKEI (Page 2) (Abridged slightly)
September 2, 2008

Prime Minister Yasuo Fukuda's announcement of resignation is likely
to cause a vacuum in the country's foreign policy. His decision is
expected to affect the issue of Japanese nationals abducted by North

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Korea as well. With the United States scheduled to have a new
administration next January, Japan-U.S. relations are also in an
important transitional period. The prime minister's abrupt decision
to step down might tremendously undermine the country's national
interests diplomatically.

There was a view in the government that Pyongyang would set up an
investigative committee later this week and resume a reinvestigation
into Japanese nationals abducted by the North, as was promised. "The
North might take a wait-and-see attitude toward Japan's next
administration," a senior Foreign Ministry official said. In such a
case, the abduction issue might again reach a deadlock.

The Fukuda administration had promised that it would partially lift
its sanctions against the North in exchange for resuming the
reinvestigation. Given the uncertainty that Japan will truly
implement this agreement, the North might conclude that there is no
need to hurry the reinvestigation.

Asia diplomacy will also suffer a blow. Fukuda endeavored to improve
relations with China and South Korea, which turned icy during the
Koizumi administration. Coordination is underway for a
Japan-China-South Korea summit for Sept. 21 independent from any
international conference. The timetable for that has also become
unclear.

13) No prospects in sight for reinvestigation into Japanese
nationals abducted by North Korea

ASAHI (Page 8) (Full)
September 2, 2008

Makino, Seoul

Prime Minister Yasuo Fukuda's announcement that he will resign has
clouded the fate of North Korea's promised reinvestigation into
Japanese nationals abducted by the North despite the agreement
reached through bilateral working-level talks in August to produce a
conclusion in the fall.

According to a source close to Japan-DPRK relations, North Korea had
high regard for Prime Minister Fukuda, who made preparations for the
2002 Japan-North Korea Pyongyang Declaration as chief cabinet
secretary. The country had aimed at paving the way for normalized
ties with Japan under the Fukuda administration.

Pyongyang has kept a close eye on the Fukuda administration, whose
popularity has not improved even after a cabinet shuffle in August.
In North Korea, there has been a sense of alarm toward LDP Secretary
General Taro Aso, who is regarded as a possible successor to
Fukuda.

North Korea intends to press Japan for a political settlement not to
delay normalizing ties with the North over to the abduction issue,
whatever the results of its reinvestigation into the fate of
Japanese abductees. To that end, a political decision by the
Japanese prime minister is indispensable. Japan and North Korea held
working-level normalization talks in September last year, but then
Prime Minister Abe resigned soon after, causing bilateral relations
to stall.

14) Poll: Cabinet support down to 29 PERCENT

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NIKKEI (Page 1) (Abridged)
September 1, 2008

The public approval rating for Prime Minister Yasuo Fukuda and his
cabinet was 29 PERCENT , the Nihon Keizai Shimbun found from its
joint public opinion survey conducted with TV Tokyo on Aug. 29-30,
down 9 percentage points from the last survey conducted in early
August right after Fukuda's shuffle of his cabinet. The disapproval
rating rose 14 points to 63 PERCENT . The ruling Liberal Democratic
Party scored 37 PERCENT for its popularity, leveling off from the
last survey. However, the leading opposition Democratic Party of
Japan (Minshuto) dropped 3 points to 30 PERCENT . A total of 61
PERCENT answered "yes" when respondents were asked if they
appreciated a recent agreement reached between the government and
the ruling parties on a package of economic stimulus measures,
including a uniform income tax break.

The Fukuda cabinet's support rate, which was below 30 PERCENT in
and after April, rose 12 points after its shuffle. However, the
figure went back to the level before the cabinet shuffle.

In the breakdown of reasons (on a multiple answer basis) among those
who do not support the Fukuda cabinet, 59 PERCENT picked "the prime
minister lacks leadership," topping all other answers, followed by
"its policies are bad" at 45 PERCENT and "it's unstable" at 32
PERCENT .

The survey was taken by Nikkei Research Inc. by telephone on a
random digit dialing (RDD) basis. For the survey, samples were
chosen from among men and women aged 20 and over across the nation.
A total of 1,549 households with one or more eligible voters were
sampled, and answers were obtained from 866 persons (55.9 PERCENT
).

15) Poll: Cabinet support remains low

ASAHI (Page 2) (Full)
September 2, 2008

The latest rate of public support for Prime Minister Fukuda's
cabinet was 25 PERCENT , still remaining low, while leveling off
from the 24 PERCENT rating in the last survey taken Aug. 1-2, the
Asahi Shimbun found from its telephone-based nationwide public
opinion survey on Aug. 30-31. The nonsupport rate was 55 PERCENT ,
the same as in the last survey. The cabinet support rate has been
low at around 20 PERCENT since this April. The Fukuda cabinet's
popularity did not rebound even in the survey taken this time right
after the government launched a comprehensive economic stimulus
package.

The Fukuda cabinet's inaugural support rate was 53 PERCENT in a
survey conducted in September last year right after Fukuda became
prime minister. However, the Fukuda cabinet's approval rating
dropped to 31 PERCENT in a survey taken in mid-December due to the
government's pension record-keeping flaws. It further went down to
25 PERCENT in April this year when the government started a new but
controversial healthcare insurance system for the elderly, and
shrank to 19 PERCENT in a survey taken this May following the
ruling coalition's taking of a second vote in the House of
Representatives on a government-proposed bill to use gasoline taxes
for road-related revenues.

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The survey this time introduced the fact that the government's
economic package, which is to deal with rising prices and economic
downturn, incorporates a uniform tax break. In the survey,
respondents were asked if they appreciated this economic package. In
response to this question, 46 PERCENT answered "no," with 35
PERCENT saying "yes." Even among those who support the ruling
Liberal Democratic Party, there was a split of opinion, with 45
PERCENT affirmative and 37 PERCENT negative. Among those who
support the leading opposition Democratic Party of Japan (Minshuto),
"yes" accounted for 33 PERCENT , with "no" at 52 PERCENT .
Respondents were also asked if they were in favor of issuing
deficit-covering government bonds. To this question, "no" accounted
for 67 PERCENT , with "yes" at 15 PERCENT .

The government and the ruling coalition plan to present a bill to
the Diet at its forthcoming extraordinary session to extend the new
Antiterrorism Special Measures Law in order for Japan to continue
the Maritime Self-Defense Force's refueling activities in the Indian
Ocean. In this connection, the survey asked respondents if they
thought Japan should continue the MSDF's refueling mission in the
Indian Ocean. To this question, 50 PERCENT answered "no," with 37
PERCENT saying "yes."

Respondents were further asked which political party they would vote
for in their proportional representation blocs if they were to vote
now. To this question, the DPJ scored 31 PERCENT (32 PERCENT in
the last survey), with the LDP at 27 PERCENT (25 PERCENT in the
last survey). In the breakdown of public support for political
parties, the LDP stood at 26 PERCENT (23 PERCENT in the last
survey), with the DPJ at 20 PERCENT (22 PERCENT in the last
survey).

16) "LDP-New Komeito administration must end," DPJ President Ozawa
declares in declaring his candidacy to serve as party head for third
term

ASAHI (Page 1) (Full)
Evening, September 1, 2008

Democratic Party of Japan (DPJ or Minshuto) President Ozawa during a
press conference on the morning of September 1 formally declared his
candidacy for the party's upcoming presidential election. His
election without a vote will be determined on the 8th, the day for
the official announcement of the party presidential election,
because no other DPJ members have obtained the required number of
signatures to contest the race. His term will be two years. He will
be formally selected to the post at the special party convention on
the 21st.

Ozawa during the press conference noted: "I will run in the party
presidential election to be officially announced on the 8th. These
days, many people are finding it difficult to live a decent life
despite working hard. Politics and the economy are becoming
increasingly unstable throughout the world. The government led by
the LDP and New Komeito does not understand ordinary people's
day-to-day lives and does not have capability to address their
problems. The DPJ must create a new administration and build a new
Japan."

Speaking of his determination to serve his third term, Ozawa
revealed his plan to release on the 8th campaign pledges for the

TOKYO 00002380 012 OF 013


presidential election, saying: "I will make clear my policy and
determination if I am elected on the 21st. I will issue a brief
policy stance on the 8th." Concerning a manifesto for the next Lower
House election, he said, "I will compile one based on my policy
stance."

Regarding the selection of more than 20 supporters needed to run in
the presidential race, Ozawa said with Deputy President Naoto Kan,
Secretary General Yukio Hatoyama and Azuma Koshiishi, head of the
DPJ caucus in the Upper House, in mind, "I left the matter to fellow
party members to work out." His plan is to demonstrate an all-party
setup by obtaining endorsements based a broad-based approach.

Concerning the selection of members of the party leadership, he
simply stated, "I must refrain from mentioning that until the
presidential election ends on the 21st." The likelihood is that
Ozawa will keep Kan, Hatoyama and Koshiishi in their present posts.
The focus of attention will be on the treatment of Vice President
Katsuya Okada and Public Relations Committee Chair Yoshihiko Noda.

17) Pelosi asks Kono for continued MSDF refueling mission

ASAHI (Page 2) (Full)
Evening, September 1, 2008

Visiting U.S. House of Representatives Speaker Nancy Pelosi held a
meeting with Lower House Speaker Yohei Kono in the Diet building
earlier today. Touching on the Maritime Self-Defense Force's
refueling mission in the Indian Ocean, Pelosi said: "We have high
regard for it. It is the view of not only the Democratic Party but
also of the United States as a whole, including the Republican
Party. We earnestly hope Japan will continue the mission."

Indicating that Afghanistan is the main battlefield in the war on
terror, Pelosi defined in the meeting reconstruction assistance,
including the refueling operation, as necessary activities in the
war on terror. Kono said, "The government is considering discussing
related bills in the upcoming extraordinary Diet session. Stormy
developments are expected, as the opposition bloc is against it."

Pelosi is visiting Japan to attend the seventh Group of Eight house
speakers' meeting to be held on Sept. 2 in Hiroshima.

18) MSDF postpones training with Russia

YOMIURI (Page 2) (Full)
September 2, 2008

The government decided yesterday to postpone a bilateral naval
search and rescue exercise (SAREX) scheduled for this month between
the Maritime Self-Defense Force and Russia's Far Eastern navy. The
North Atlantic Treaty Organization (NATO) and Russia have suspended
maritime cooperation, including joint training exercises, due to the
standoff of the United States and Europe with Russia over the
Georgia conflict. The government judged that it would have to
carefully watch the situation. SAREX has been conducted since 1998,
and this is the tenth time for SAREX to be carried out between Japan
and Russia. It is the only bilateral training exercise between the
two countries' military forces. SAREX has been conducted in
anticipation of sea accidents, and the MSDF and the Russian navy
cooperate to search and rescue missing persons.


TOKYO 00002380 013 OF 013


Regarding the postponement this time, the government has also
indicated that Russia has shown understanding on missile defense
being promoted between Japan and the United States and that the
security environment of Japan quite differs from that of Europe.
Japan will postpone the SAREX session for a while. Meanwhile,
Defense Minister Hayashi will shortly visit the United States. After
his return home, the government will ask the Russian navy to
reschedule the exercise.

The joint training exercise had been initially scheduled to be
carried out in waters off Sasebo, Nagasaki Prefecture, from Sept. 9.
However, a Russian missile destroyer is to enter the port of Sasebo,
where the U.S. Navy controls piers. The MSDF therefore changed the
port to its Maizuru base in Kyoto Prefecture and also changed the
training area to waters in the Sea of Japan off Maizuru.

Defense exchanges between Japan and Russia started after the first
official visit of a Defense Agency director general (state minister)
to Russia in 1996. This fall, following SAREX, Ground Self-Defense
Force echelon staff officers will visit Russia to see a Russian army
drill for the first time. In addition, the Air Self-Defense Force's
Northern Air Defense Force commander is also scheduled to visit
Russia.

ZUMWALT

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