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Cablegate: Japanese Morning Press Highlights 09/04/08

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UNCLAS SECTION 01 OF 13 TOKYO 002418

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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 09/04/08

Index:

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

Opinion polls:
4) Kyodo poll after Prime Minister Fukuda's resignation finds LDP
support rate rose, with 35 PERCENT of public favoring Taro Aso as
his replacement (Tokyo Shimbun)
5) Asahi poll: 56 PERCENT of public want swift Diet dissolution for
a snap election, and 66 PERCENT call Fukuda's resignation
"irresponsible" (Asahi)

LDP election frenzy:
6) Momentum for supporting Yuriko Koike as LDP presidential
candidate is growing (Mainichi)
7) Koike lining up party support in a bid for LDP presidency
(Sankei)
8) Fiscal Policy Minister Yosano intends to run in the LDP
presidential race (Yomiuri)
9) Junior LDP lawmakers fume over the party election rules that they
see as biased (Asahi)
10) Democratic Party of Japan (DPJ) alarmed by polls showing
stronger LDP presence, plans effective media campaign (Asahi)

Economic policy:
11) With Fukuda's resignation, economic policy agenda drifting
rudderless (Yomiuri)
12) Government's supplemental budget to be partially funded by
construction bonds up to 500 billion yen (Yomiuri)

13) LDP, New Komeito agree to submit to the upcoming extraordinary
Diet an anti-terror bill allowing MSDF refueling service to continue
in the Indian Ocean (Yomiuri)

Asia diplomacy:
14) Trilateral Japan-China-ROK meeting scheduled for ASEAN event may
be carried out separately at a later date; New premier may attend
UNGA, give speech (Mainichi)
15) Foreign Ministry sees delay in North Korea's reinvestigation of
abductee issue as "unavoidable" (Asahi)
16) Government perplexed by North Korea's statement it is restoring
a disabled nuclear facility (Tokyo Shimbun)

Articles:

1) TOP HEADLINES

Asahi:
Poll: 56 PERCENT hope for early Lower House election; 66 PERCENT
say Prime Minister Fukuda's resignation "irresponsible"

Mainichi & Sankei:
Yuriko Koike expedites securing necessary recommendations from 20
lawmakers to run in LDP presidential race

Yomiuri:
Yosano eager to run in LDP presidential election

Nikkei:
Japan to introduce international accounting rules in 2011 or later

TOKYO 00002418 002 OF 013

Tokyo Shimbun:
Kyodo poll: Fukuda's announcement of resignation boosts support rate
for LDP

Akahata:
Time to change politics: JCP urges prefectural committees to ready
for general election

2) EDITORIALS

Asahi:
(1) U.S. House Speaker Pelosi's visit to Hiroshima significant first
step
(2) Need to support Japanese filmmakers

Mainichi:
(1) Suspicion of sumo wrestlers using marijuana: Can confidence in
national sport be secured?
(2) U.S.-India nuclear cooperation pact: How about North Korea's
nuclear weapons? (Hiroshi Fuse, editorial writer)

Yomiuri:
(1) Employment and Human Resources Development Organization:
Wasteful administrative body should be dissolved
(2) Paralympics: It doesn't matter how many medals athletes win

Nikkei:
(1) Economic slowdowns going global
(2) Russia must respond to EU arbitration

Sankei:
(1) U.S. presidential race: Hope that new president will strengthen
Asia policy
(2) Sumo wrestlers' drug abuse: Nihon Sumo Kyokai president must
realize responsibility

Tokyo Shimbun:
(1) State of emergency in Thailand: Both government and
antigovernment forces must exercise restraint
(2) Sumo wrestlers' using marijuana: Thorough investigation
absolutely necessary

Akahata:
(1) Military budget request: Japan should drastically cut military
spending

3) Prime Minister's Official Residence (Kantei)

Prime Minister's schedule, September 3, 2008

NIKKEI (Page 2) (Full)
September 4, 2008

09:48
Met with Meteorological Agency Director General Hiraki at the
Kantei, followed by Cabinet Office Director General Omori.

10:42
Met with Chief Cabinet Secretary Machimura.

11:47

TOKYO 00002418 003 OF 013


Met with State Minister for Economic and Fiscal Policy Yosano.

14:02
General assembly of LDP lawmakers from both Diet chambers

14:52
Meeting of the national council on social security at the Kantei

16:08
Met with Vice Economy, Trade and Industry Minister Mochizuki and
Small and Medium Enterprise Agency Director General Hasegawa.

17:01
Met with State Minister for Consumer Administration Noda, followed
by Vice Cabinet Office Minister Yamamoto.

17:56
Arrived at the official residence.

4) Poll: LDP support rate rises after premier announces resignation;
Aso ranks as top choice for next premier with 35 PERCENT of public

TOKYO SHIMBUN (Top play) (Full)
September 4, 2008

In the wake of Prime Minister Yasuo Fukuda's recent announcement of
his resignation, Kyodo News conducted a telephone-based spot
nationwide public opinion survey from the evening of Sept. 2 through
Sept. 3. In the poll, respondents were asked who they thought would
be appropriate for prime minister after Fukuda. In response, Taro
Aso, secretary general of the ruling Liberal Democratic Party,
ranked first with 35.3 PERCENT . Respondents were also asked which
political party they would like to vote for in the next election for
the House of Representatives in their proportional representation
blocs. To this question, 38.4 PERCENT chose the LDP, with 34.9
PERCENT preferring the leading opposition Democratic Party of Japan
(Minshuto). As seen from these figures, the LDP slightly outstripped
the DPJ.

Asked about the framework of government, 43.3 PERCENT chose an
"LDP-led coalition government," up 8.5 percentage points from the
last survey taken in August. Those preferring a "DPJ-led coalition
government" accounted for 41.7 PERCENT , down 6.5 points. In this
preference of coalition government, the LDP topped the DPJ for the
first time in about six months since the March survey. In the
breakdown of public support for political parties as well, the LDP
rose 8.1 points to 36.8 PERCENT , with the DPJ dropping 3.2 points
to 27.0 PERCENT .

Prime Minister Fukuda, whose cabinet's popularity has been hanging
low, will now step down, and the LDP will elect a new president.
Public expectations for this seem to be a factor behind the rebound
in the party's public support.

In the survey, respondents were further asked to pick one from among
10 LDP lawmakers as an appropriate person to become the next prime
minister. Ranking next to Aso was former Prime Minister Junichiro
Koizumi at 15.0 PERCENT , followed by former Defense Minister Yuriko
Koike at 9.2 PERCENT , Health, Labor and Welfare Minister Yoichi
Masuzoe at 8.5 PERCENT , and former LDP Policy Research Council
Chairman Nobuteru Ishihara at 7.1 PERCENT .


TOKYO 00002418 004 OF 013


Asked about Fukuda's announced resignation, 67.8 PERCENT answered
that it was "irresponsible." His cabinet's support rate was 23.5
PERCENT , down 8.0 points.

In the breakdown of public support for political parties other than
the LDP and the DPJ, the New Komeito, the LDP's coalition partner,
was at 2.5 PERCENT , with the Japanese Communist Party at 1.7
PERCENT , the Social Democratic Party at 1.9 PERCENT , the People's
New Party at 0.4 PERCENT , and the New Party Japan at 0.8 PERCENT .

5) Poll: 56 PERCENT call for snap election, 66 PERCENT see
premier's resignation as "irresponsible"

ASAHI (Top play) (Abridged)
September 4, 2008

In the wake of Prime Minister Fukuda's announcement of his
resignation, the Asahi Shimbun conducted a telephone-based spot
nationwide public opinion survey. In the survey a total of 66
PERCENT answered "yes" when asked if they thought the prime
minister's sudden announcement of his resignation was irresponsible,
with 25 PERCENT saying "no." The answer "yes" accounted for 77
PERCENT among those who support the leading opposition Democratic
Party of Japan (Minshuto), 64 PERCENT among those with no
particular party affiliation, and 61 PERCENT even among those who
support the ruling Liberal Democratic Party. There was strong
criticism irrespective of party affiliation. In the survey,
respondents were also asked if they thought the House of
Representatives should be dissolved for a general election as early
as possible. To this question, "yes" accounted for 56 PERCENT , with
"no" at 33 PERCENT .

Respondents were also asked who they would like to see become the
next prime minister. In this popularity rating for post-Fukuda
premiership, LDP Secretary General Taro Aso ranked first at 30
PERCENT . The second-ranking person was DPJ President Ichiro Ozawa
at 8 PERCENT , followed by former Prime Minister Junichiro Koizumi
at 4 PERCENT and former Defense Minister Yuriko Koike at 3 PERCENT
.

In the breakdown of public support for political parties, the LDP
stood at 29 PERCENT (26 PERCENT in the last survey), with the DPJ
at 21 PERCENT (20 PERCENT in the last survey). In the popularity
ranking of political parties for proportional representation in the
next election for the House of Representatives, the LDP marked 28
PERCENT (27 PERCENT in the last survey), with the DPJ at 32
PERCENT (31 PERCENT in the last survey).

6) LDP presidential race: Koike rushing to collect endorsement
signatures; Ishihara also in spotlight as third candidate

MAINICHI (Top Play) (Excerpts)
September 4, 2008

Secretary General Taro Aso has already announced his intention to
run in the Liberal Democratic Party's (LDP) presidential election.
Former Defense Minister Yuriko Koike is now trying to secure
endorsement signatures needed to run in the race. Mid-ranking
lawmakers, including former Policy Research Council Chairman
Nobuteru Ishihara, who is eager to run in the race, have launched
efforts to field a third candidate in a cross-sectional move. Names
like Ishihara, former Chief Cabinet Secretary Yasuhisa Shiozaki and

TOKYO 00002418 005 OF 013


State Minister for Administrative Reform Toshimitsu Motege were
cited at a meeting of 10 such lawmakers. In the meantime, State
Minister for Consumer Administration Seiko Noda, who had left open
the possibility of running in the race, ruled out the possibility.

Aso will formally declare his candidacy on the 8th. He will focus on
preparations for the race, including mapping out a policy platform,
by leaving his duties as secretary general to General Council
Chairman Takashi Sasagawa. The primary concern for Koike is whether
she can secure the 20 endorsements needed to run in the presidential
election.

7) Koike trying to secure necessary number of sponsors to run for
LDP president

SANKEI (Top Play) (Excerpts)
September 4, 2008

The Liberal Democratic Party decided in meetings of the Executive
Council and other committees yesterday to officially announce the
presidential election to select a successor to Prime Minister Yasuo
Fukuda on Sept. 10 and hold the election on the 22nd. The party
reported the decision in a joint plenary meeting of party members of
both Houses of the Diet. Taro Aso will resign as secretary general
on the 6th to run for the party presidency and will leave the post
to the acting secretary general. Within the party, moves are
accelerating to field rival candidates to run against Aso. Former
Defense Minister Yuriko Koike has already indicated a willingness to
run in the election and is now eagerly trying to secure the
necessary number of recommenders. Junior members are also gearing up
to field their own candidate.

In a press conference in Tokyo yesterday, Koike expressed her
eagerness to run in the election, saying: "I have contacted many
party members." Changing her initial schedule and confining herself
to her office in the House of Representatives Dietmembers' Building
yesterday, Koike devoted herself to canvassing names of the 20 party
members needed to run for party presidency. Yamazaki faction members
and others have recommended former Policy Research Council Chairman
Nobuteru Ishihara, but the focus of attention is on whether such
potential candidates will be able to secure the necessary number of
recommenders.

Aiming at "policy debate in an open presidential election campaign,"
mid-ranking and junior members are moving to seek their own
candidates by holding meetings transcending factional borders. An
increasing number of members are now recommending State Minister for
Economic and Fiscal Policy Kaoru Yosano and Land, Infrastructure and
Transport Minister Sadakazu Tanigaki. Meanwhile, Lower House member
Taro Kono has given up on his candidacy.

The LDP presidential election will consist of 528 votes to be cast
by 387 party legislators and 141 local chapter representatives with
three votes allocated to each local chapter. The voting will take
place in a joint plenary meeting of party members of both Houses of
the Diet on the afternoon of Sept. 22.

Only Aso is now certain to run in the election. Although Koike,
Ishihara, and others have been suggested as potential candidates,
they have yet to secure 20 recommenders. Lawmakers seem to have been
in emotional turmoil over whether they should give priority to their
factions or an open political party advocated by former Prime

TOKYO 00002418 006 OF 013


Minister Junichiro Koizumi.

8) Yosano eager to run in LDP presidential race; junior lawmakers
feeling out possibility of filing own candidate

YOMIURI (Top Play) (Full)
September 4, 2009

A move in the Liberal Democratic Party (LDP) emerged yesterday
aiming at fielding Economic and Financial Policy Minister Kaoru
Yosano in the Sept. 22 party presidential election. Yosano has
expressed his willingness to run in the presidential race. The
official campaign for the LDP presidential race will kick off on
Sept. 10. There is also a move to file former Defense Minister
Yuriko Koike as a candidate to vie against Secretary General Taro
Aso, who has already expressed his intention to run. However, junior
and mid-level lawmakers are looking into the possibility of fielding
their own candidate. Yosano does not belong to any faction. Koike is
a member of the Machimura faction.

As of Sept. 3, Policy Research Council Deputy Chairman Hiroyuki
Sonoda, a member of the Koga faction, and Masazumi Gotoda, who is a
Lower House member with no factional allegiance, have asked Yosano
to stand in the election.

Gotoda told the press corps yesterday: "I want Yosano to come
forward at any cost."

One of LDP lawmakers supporting Yosano said: "There is a prospect
that we will be able to garner the support of 20 Diet members, the
number needed to stand in the presidential election."

Yosano has advocated that in order to stabilize the social security
system, a consumption tax hike is necessary. He holds a different
view from a group of lawmakers, centering on Secretary General
Hidenao Nakagawa, who have called for putting off tax increases.

In a bid to maintain the structural reform policy course, Nakagawa
has been working on fielding Koike. He yesterday telephoned Taku
Yamasaki, head of the Yamasaki faction, to ask him to support
Koike.

The Machimura faction, the largest in the party, has decided not to
back a specific candidate as one body.

"At this time, we cannot prevent a person who wants to stand in the
race from running," former Prime Minister Yoshiro Mori, a supreme
advisor to the Machimura faction, told reporters, when asked how he
would respond if Koike announced her candidacy. He indicated that he
would accept Koike's intent.

Regarding the move by junior and mid-level lawmakers, Lower House
member Taro Kono, a member of the Aso faction, has begun calling on
such LDP members to back him if he runs in the race. It remains
uncertain whether he can garner support from 20 lawmakers.

Kono held talks with Nobuteru Ishihara, a Yamasaki faction member
and former policy chief, Yasuhisa Shiozaki, a Koga faction member
and former chief cabinet secretary, and former Administrative Reform
Minister Yoshimi Watanabe, who does not belong to any faction. The
four shared the perception that it would be desirable to hold a
presidential race involving three or four candidates engaged in

TOKYO 00002418 007 OF 013


thorough policy debates.

9) Junior LDP lawmakers voice dissatisfaction with presidential
election method

ASAHI (Page 1) (Excerpts)
September 4, 2008

The Liberal Democratic Party reported at a joint meeting of its
members in both chambers yesterday that presidential campaigning
would start on Sept. 10 for the election on Sept. 22. The method of
allocating three votes to each prefectural chapter drew fire mostly
from junior members, who think greater weight should be shifted to
local votes.

In an LDP presidential election that occurs when the president has
served out the full term, rank-and-file party members cast ballots
that will be converted into 300 local votes. In an emergency
situation resulting from the resignation of the president, votes are
to be cast by members of the Upper and Lower Houses and three
members representing each prefectural chapter. In such an instance,
the number of local votes would be 141, less than half of the
original votes.

Based on the party rules, the Presidential Election Administration
Committee has decided on votes by prefectural representatives
without ballots by rank-and-file members, as was the case last year
when the party selected a successor to then Prime Minister Abe. In
response to Election Committee Chairman Hideo Usui's report in
yesterday's meeting, Senior Vice-Foreign Minister Ichita Yamamoto
said: "It is going to be the last chance for the LDP to turn around
the situation and determine its future. We should allot 300 votes to
the local chapters." Other junior members echoed Yamamoto's view.

But Joint Meeting Chairman Shuzen Tanigawa put an end to the
discussion, saying, "Time's up." This prompted midlevel and junior
members to complain that discussion must not be called off halfway
through. The party's intention to play up an open presidential
election stumbled from the outset.

10) DPJ alarmed at being overshadowed by LDP, after noting recovery
of public support for that party in opinion poll; Plans to place
emphasis on measures to draw media attention

ASAHI (Page 4) (Full)
September 4, 2008

A nationwide spot opinion poll has showed public support for the
Liberal Democratic Party (LDP) to be recovering. The survey was
conducted on Sept. 2-3 by the Asahi Shimbun following Prime Minister
Fukuda's announcement of his decision to step down. Alarmed that
this trend might intensify as the party presidential election
campaign begins in full swing, the Democratic Party of Japan (DPJ)
yesterday launched a team to map out measures to draw media
attention to itself.

The team, headed by Secretary General Yukio Hatoyama, will look into
ways to transmit the party's information. Asked for his view about
the recovery of public support for the LDP in an interview with the
Asahi Shimbun, Hatoyama replied: "The survey result is attributed to
the media's focus on the LDP preparing for its presidential race and
other events following Prime Minister Fukuda's resignation

TOKYO 00002418 008 OF 013


announcement." He emphasized the need to take countermeasures,
remarking: "The DPJ has been criticized as lacking unity, but it is
really important now for the party to show that the party is unified
under President Ozawa."

One executive implied a sense of alarm, saying: "We had not
anticipated that Mr. Fukuda would resign as prime minister at this
juncture. Our party might be submerged, because members in the LDP
are wrangling over who should become next prime minister. We must
seriously consider how to send our message."

Meanwhile, Diet Affairs Committee Chairman Kenji Yamaoka was
optimistic in commenting: "When a new prime minister comes in, the
people expect the situation will get better. This is just a normal
phenomenon. Public support of the LDP will drop as time passes."

In reply to a question about who is desirable as next premier, far
more respondents picked LDP Secretary General Aso than those who
chose Ozawa. One DPJ executive grumbled: "It cannot be helped
because Mr. Aso is the frontrunner in the presidential election,"
and another said: "It is because Mr. Aso belongs to the ruling
camp."

11) With Prime Minister Fukuda stepping down, future course of
economic policy unclear

YOMIURI (Page 9) (Full)
September 4, 2008

An unstable political situation has developed, following Prime
Minister Fukuda's announcement of his intention to step down,
affecting budget compilation-related matters and the implementation
of an economic stimulus package, including environmental protection
measures.

"Will the meeting really take place?"

The Fiscal Policy System Council, an advisory panel reporting to the
finance minister, launched discussion on September 3 on the
compilation of the fiscal 2009 budget. There are many key issues on
the agenda, such as the reallocation of special road-construction
funds for other uses and raising the portion of the state's
contribution to the basic pension. However, government circles are
deeply perplexed by the prime minister's sudden resignation
announcement and the ensuing confusion in the political situation,
as can be seen in Chairman Taizo Nishimuro's having received phone
calls on the previous day from several panel members asking whether
the meeting would actually take place.

Concerning the compilation of the fiscal 2009 budget, specific
measures to constrain the growth of social security expenses by 220
billion yen have yet to be adopted. How to constrain various
ambitious budget requests filed by each government agency, including
the education ministry's request for increasing school personnel, is
also a thorny issue.

Nishimuro during a press conference on the 3rd stressed his
intention to move forward with discussions in the run-up to the
year-end compilation of the budget, regardless of the current
unstable political situation. He said: "The economic and political
situation will remain unclear for some time to come. However, I want
to move ahead with the budget compilation process without being

TOKYO 00002418 009 OF 013


captivated by the current unstable situation." The panel at the
meeting also confirmed its stance of compiling a report proposing
the compilation of the budget.

However, depending on who will become the next prime minister, it
may become necessary to drastically change the basic approach to
compiling the budget. It is unlikely that the direction for the
discussions will be set anytime soon.

Meeting cancelled all of sudden

Prime Minister Fukuda in July compiled the action program designed
to realize a low carbon society as part of measures to address
global warming and revealed a plan to launch on a trial basis a
carbon emissions trading system allowing companies to trade
emissions credits in October. However, the Liberal Democratic Party
(LDP) yesterday all of a sudden cancelled a meeting to discuss a
specific trading method, using preparations for the presidential
election as justification.

The government intends to steadily implement the system, as one
senior Economy, Trade and Industry Ministry official put it.
However, there is concern that creation of the system might be
delayed.

The prime minister's resignation announcement is also casting a pall
over the fate of trade policy. Now that the new multilateral trade
liberalization talks (Doha Round) under the World Trade Organization
(WTO) have been put on hold, the government wants to boost bilateral
trade talks. However, negotiations with South Korea are encountering
difficulty. Japan is also at odds with Australia over the
liberalization of the agricultural market. Political leadership is
indispensable in bargaining with those countries. Under the present
circumstance, the pace of negotiations could slow.

In response to Prime Minister Fukuda's wish to increase food
self-sufficiency, the Ministry of Agriculture, Forestry and
Fisheries intends to compile a plan to amend the farming land system
with the aim of expanding the scale of agricultural management, by
making the leasing of faming land easier, and submit related bills
to the regular Diet session next year. However, some are beginning
to doubt the feasibility of a set of policies with one saying,
"There is no guarantee that the new administration would follow
through with the current policy."

12) Finance Ministry to issue 500 billion yen in construction bonds
to fund supplementary budget

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

The Finance Ministry on September 3 revealed a plan to issue
construction bonds worth about 500 billion yen to fund the fiscal
2008 supplementary budget to be compiled as part of a comprehensive
economic stimulus package.

The government and the ruling parties revealed a plan to secure
approximately 1.8 trillion yen from the supplementary budget to
cover portions of national expenses to be used for the economic
stimulus package. It had been estimated that there would be a
shortage of funding resources even after reserved funds from the
initial fiscal 2008 budget and a surplus from the fiscal 2007 budget

TOKYO 00002418 010 OF 013


are used to implement the package.

The government, however, originally had decided not to issue
additional deficit-covering government bonds to finance the
supplementary budget to ensure that the policy of restoring fiscal
balance could be upheld. Construction bonds are issued in order to
share with future generations the cost of constructing state assets
to be used for a long period of time, such as buildings and roads.
They are differentiated from deficit-covering government bonds
issued to make up for a shortfall in government expenses. However,
there are no differences between the two types of bonds in the sense
that issuing such bonds would increase the national debt.

The government will consider using construction bonds to finance
mainly quake-proofing projects for public elementary and middle
schools throughout the nation.

13) LDP, New Komeito agree to submit MSDF bill to extra Diet
session

YOMIURI (Page 4) (Full)
September 4, 2008

The ruling coalition of the Liberal Democratic Party and the New
Komeito held the first meeting of its project team on the new
Antiterrorism Special Measures Law in the Diet yesterday, with
former LDP Vice President Taku Yamasaki presiding. The LDP and the
New Komeito agreed in the meeting to present a bill at the
forthcoming extraordinary Diet session amending the law to extend
the Maritime Self-Defense Force's refueling activities in the Indian
Ocean for another year. The ruling parties will make a formal
decision in the project team's next meeting on Sept. 9. The two
parties also confirmed that they would call on the leading
opposition Democratic Party of Japan (Minshuto), which is opposed to
extending the MSDF's refueling mission, for policy talks. However,
there are no prospects for the legislation to pass the Diet.

After the meeting, Yamasaki indicated that the LDP, based on the
outcome of the project team's next meeting, would enter into
procedures to present the bill to the Diet. "We want to present the
legislation (revising the new antiterror law)," Yamasaki told
reporters. New Komeito Policy Council Chairman Yamaguchi also said
it was "only natural" to present the bill.

In the meeting, however, the project team did not go so far as to
discuss whether the ruling coalition would be able to pass the bill
during the extraordinary Diet session. This is because there is
still a perception gap between the two parties.

If the bill revising the law is rejected in the
opposition-controlled House of Councillors, the LDP will take a
second vote in the House of Representatives with a majority of
two-thirds or more to override the upper chamber's decision. However
the New Komeito remains reluctant to take a second vote in the lower
chamber. In order for the ruling coalition to present the bill, the
New Komeito has made it a precondition that the public's
understanding must be sought and that policy talks with the DPJ and
other opposition parties must be held.

The LDP will try to find common ground with the DPJ out of
consideration for the New Komeito. However, the LDP is pessimistic
about that idea. "The DPJ is strengthening its stand against us, so

TOKYO 00002418 011 OF 013


they won't respond to policy consultations," a former cabinet
minister said.

Meanwhile, the LDP and the New Komeito discussed almost nothing in
the meeting about the idea of sending out the Self-Defense Forces
for assistance activities in Afghanistan partly because of the local
security situation going from bad to worse. "We are not considering
any major changes in the (SDF's) activities," Yamaguchi said.

14) Japan-China-South Korea summit in danger; Next prime minister
could attend UNGA

MAINICHI (Page 5) (Abridged slightly
September 4, 2008

Japan was scheduled to host a trilateral summit with China and South
Korea in Kobe on Sept. 21 for the first time independently apart
from ASEAN summits. It was an important diplomatic event to confirm
Japan's status as a leader and close ties among the three countries
that serve as the engine of East Asia's politics and diplomacy.
Japan bore heavy responsibility as the host of the event.

Chief Cabinet Secretary Nobutaka Machimura officially announced
yesterday the postponement of the trilateral summit. He said: "We
will continue making coordination to hold the event in Japan before
the end of the year." September was picked because the Beijing
Olympics were scheduled for August, an Asia-Europe Meeting for
October, an Asia-Pacific Economic Cooperation meeting for November
and an East-Asia Summit for December. If September is passed up,
holding an independent trilateral summit will be difficult.

A senior Foreign Ministry official said: "Adjusting the timetables
of the top leaders of the three countries is extremely difficult.
The trilateral summit might be held on the sidelines of ASEM or
other events." A Japan-South Korea summit and a Japan-China summit
were held in Japan in April and May, respectively. Hosting the
independent trilateral summit based on those events carried great
significance for Japan, which wants to set its relations with China
and South Korea at the center of its Asia diplomacy. Holding the
trilateral summit on the sidelines of an international conference is
effectively tantamount to halting the event.

Political turmoil resulting from the changeover of the prime
minister also prevented Japan from delivering a speech at the UN
General Assembly in New York in 2006 and 2007.

Prime Minister Yasuo Fukuda, wanting to avoid Japan's absence for
the third consecutive year, expressed his eagerness to attend the
UNGA this year until shortly before his resignation announcement. It
is impossible for an outgoing prime minister to attend UNGA,
according to a senior Foreign Ministry official. For this reason,
Machimura expressed hope that the next prime minister will attend
the UNGA regardless of the tight schedule. Such a suggestion comes
from the desire to play up the next prime minister's presence ahead
of the next Lower House election.

The prevailing view is that the Japanese prime minister will deliver
a speech at the UNGA on Sept. 25, local time. The next LDP president
is scheduled to be elected on Sept. 22 and will also be elected as
the next prime minister at the outset of the next extraordinary Diet
session on the 24th. According to a high-ranking government
official, it is possible for the new prime minister to deliver a

TOKYO 00002418 012 OF 013


speech at the UNGA by leaving Japan late at night on the 24th or on
the morning of the 25th after assuming office and returning home
that day by taking advantage of the time difference. It would be a
three-day, zero-night trip to the United States, however.

The government and ruling coalition are fixated on the UNGA because
it is a rare diplomatic event at which that the next prime minister
can demonstrate his presence, given the possibility of a Lower House
dissolution for a snap general lection before the end of the year.
In reality, traveling to the United States immediately after being
elected prime minister seems quite difficult. An opposition lawmaker
has raised a question about the next prime minister delivering a
speech overseas before doing so in Japan. Obtaining Diet approval is
not possible before the next prime minister is determined. UNGA
attendance is on the line.

15) Foreign Ministry official suggests delay in reinvestigation into
abductees

ASAHI (Page 4) (Abridged slightly)
September 4, 2008

A senior Foreign Ministry official indicated yesterday that chances
are high that the start of a reinvestigation into the fate of
Japanese abductees by North Korea would be delayed due to Prime
Minister Fukuda's resignation. He said: "North Korea could take a
wait-and-see attitude until the next Japanese administration is
determined."

Through Japan-DPRK working-level talks in August, the two countries
agreed for Japan to lift restrictions on visits between the
countries and to allow chartered flights linking the nations in
return for the North setting up a reinvestigation committee at an
early time. But Japan has not received any notice from the North
about the establishment of the investigation committee.

In the talks, the two countries also agreed to aim at completing the
reinvestigation in the fall. The official said: "A delay in the
investigation naturally will delay results."

16) Government perplexed at report on North Korea's reassembling of
nuclear facility, fearing effect on abduction issue

TOKYO SHIMBUN (Page 2) (Full)
September 4, 2008

A U.S. media company's report that North Korea has begun restoring
its Yongbyon reactor perplexed Japanese government officials
yesterday. In the last days of the Fukuda administration, the
stalled issues with North Korea have plunged deeper into confusion.

Chief Cabinet Secretary Nobutaka Machimura said in a press
conference yesterday that the government has yet to confirm whether
the information is true.

Foreign Ministry spokesman Kazuo Kodama said in a press briefing:
"We are aware of the report. The ministry has been exchanging
information in close cooperation with other countries concerned." He
added: "We hope North Korea will resume disabling its nuclear
facilities and complete the work by the end of October."

In late August, North Korea issued a statement noting that it would

TOKYO 00002418 013 OF 013


cease its dismantlement program and consider putting the facility
back together. If the report is proved true, it is a great shock for
Japan.

The efforts made so far in the six-party talks to urge North Korea
to dismantle its nuclear facilities may come to naught. In such a
case, the nuclear threat might grow. If North Korea stiffens its
attitude further, it may also become impossible to move forward
negotiations on the issue of Japanese nationals abducted by its
agents.

The report came in just after Prime Minister Fukuda announced his
intention to step down. When the prime minister is unable to
demonstrate his leadership, the government finds it difficult to
decide how to respond and will have to take a wait-and-see attitude
for a while.

ZUMWALT

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