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Cablegate: Japanese Morning Press Highlights 09/08/08

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UNCLAS SECTION 01 OF 09 TOKYO 002451

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 09/08/08

Index:

Election time:
1) Likelihood growing of Diet dissolution at the beginning of the
upcoming extraordinary session of the Diet (Asahi)
2) Lower House election looking likely for Nov. 9, with announcement
on Oct. 28 (Mainichi)
3) Candidates for LDP presidency debate: Taro Aso promises 3 years
of fiscal stimulation, Kaoru Yosano seeks to use consumption tax as
social welfare tax (Yomiuri)
4) Yuriko Koike to declare her candidacy for LDP president today
(Nikkei)
5) Time for New Komeito Representative Ota to be reelected on the
23rd (Nikkei)
6) Ichiro Ozawa to declare candidacy for reelection as DPJ president
today (Sankei)
7) DPJ's Naoto Kan lays out party's manifesto centered on "two
revolution and three reforms" (Tokyo Shimbun)
8) DPJ's Hatoyama says party will boycott all Diet deliberations on
the supplementary budget bill (Tokyo Shimbun)

North Korea problem:
9) New allegation of still another abduction of a Japanese citizen
by North Korean agents, this time only 10 years ago (Sankei)
10) Resolving abduction issues becoming even more remote with North
Korea's postponement of reinvestigation (Yomiuri)

11) Declassified U.S. State Dept. documents from 1960s reveal U.S.
side treated low-level releases of nuclear-sub water visiting Japan
as "necessary" (Akahata)

12) Japan Business Federation (Keidanren) will tolerate
environmental tax as long as it is not a new tax but redirected
money from road tax revenues (Asahi)

Articles:

1) Lower House to be dissolved at outset of extraordinary Diet
session; general election likely in early November

ASAHI (Top Play) (Excerpts)
September 8, 2008

The ruling Liberal Democratic Party and its coalition partner New
Komeito have launched coordination with the possibility of electing
a new prime minister in the upcoming extraordinary Diet session,
planned to be convened on Sept. 24, and of dissolving the House of
Representatives immediately after a new cabinet is inaugurated.
Since the ruling parties are now considering holding a Lower House
election after the new prime minister's policy speech and
questioning sessions by party representatives, the Lower House will
be dissolved in effect at the outset of the extraordinary Diet
session. The most likely option is that the Lower House will be
dissolved in late September or early October and that a general
election will be held on Nov. 2 or 9.

The prevailing view in the ruling coalition soon after Prime
Minister Yasuo Fukuda's announcement of his resignation was that the
Lower House should be dissolved to call a snap election after
adopting a supplementary budget for fiscal 2008, which includes a
package of economic stimulus measures. Assuming, however, that the
new cabinet's support rate will rise, since the LDP's approval rate

TOKYO 00002451 002 OF 009


is now on the increase in various media polls with all eyes fixed on
its presidential election, in which more than five lawmakers have
announced their intention to run, the view has gained ground in the
ruling camp that it would be better to hold the general election
soon after the new cabinet is inaugurated.

Although many in the New Komeito, which places importance on
implementing economic measures, hope that the Lower House will be
dissolved after the supplementary budget is adopted, the party is
expected to accept the LDP's idea, as it has called for an early
Lower House dissolution.

LDP Election Strategy Council Chairman Makoto Koga on an NHK TV
program yesterday said that the Lower House should be dissolved
after the new prime minister's policy speech and questioning
sessions by party representatives. He said: "I think the best
schedule would be if we can face a general election after making the
best of the LDP leadership race."

Asked about his view on the voting date for the general election,
Koba said: "I think October would make the schedule rather tight."
He indicated that the election would be held in early November or
later.

Another senior LDP member admitted that the LDP and New Komeito were
discussing the matter, saying

"If we deliberate on the supplementary budget, the momentum of the
presidential race will come to a stop. It would be better for us to
dissolve the Lower House at the outset of the extraordinary Diet
session."

2) Lower House election likely to be held on Nov. 9

MAINICHI (Page 1) (Excerpts)
Sept. 8, 2008

A Lower House election will likely be held on Nov. 9, with the
campaign for the race kicking off on Oct. 28, several senior ruling
coalition members revealed yesterday. The ruling parties plan to
convene the next extraordinary Diet session on Sept. 24. The outlook
is therefore that the new prime minister will dissolve the Lower
House in early October, after the questioning sessions by party
representatives following the prime minister's policy speech at the
extraordinary Diet session. The ruling coalition has judged it
better to hold the general election soon after the LDP leadership
race, on which all eyes are fixed.

The ruling camp is now carrying out coordination to hold the new
prime minister's policy speech on Sept. 29 and each party's
representative interpellations at both chambers of the Diet on Oct.
1-3.

Although the New Komeito, the LDP's junior coalition partner, had
called for a Lower House dissolution later this year or early next
year, many in the LDP wanted to avoid an early dissolution due to
the cabinet low support rating. However, many LDP lawmakers have now
shifted their stand as the LDP presidential race has actually begun
following Prime Minister Yasuo Fukuda's sudden announcement of his
resignation. A senior LDP member yesterday said:

"Now matter who becomes prime minister, there will be no choice.

TOKYO 00002451 003 OF 009


There is no prospect for getting approval of a supplementary budget
bill from the opposition. So, the new prime minister will have no
other choice but to dissolve the Lower House."

The view accepting the idea of holding the general election on Nov.
9 is now gaining ground in the New Komeito, which has stressed the
need for enacting the supplementary budget bill as their effort to
appeal to the public, with the Lower House election in mind. A
senior New Komeito member said: "Since more than one month is needed
to enact the supplementary budget, we may loose the LDP election's
bounce."

3) In LDP presidential race, Aso to propose increasing government
spending over next three years, while Yosano to pledge to allocate
consumption tax revenues for social security purposes

YOMIURI (Page 1) (Excerpts)
September 8, 2008

Secretary General Taro Aso and State Minister for Economic and
Fiscal Policy Kaoru Yosano will run in the Liberal Democratic Party
presidential election (official announcement on Sept. 10 and
election on the 22nd). Aso is willing to aggressively increase
government spending over the next three years to buoy up the
economy, according to his blueprint for the leadership of the party
revealed yesterday. Meanwhile, Yosano is expected to maintain the
current government policy of fiscal restraint in his blueprint.
Yosano intends to pledge to allocate consumption tax revenues for
social security programs and to tackle the drastic reform of the tax
system, including the consumption tax, over the next three years,
showing a quite different stance from Aso in terms of fiscal
management.

Aso is expected to announce his campaign manifesto, titled "Japan's
potential strength - Creating a strong and cheerful Japan,"
tomorrow. He says in his manifesto: "I will take measures to boost
the economy through tax cuts and regulatory reforms," apparent with
an eye on improving the preferential tax system for stock swaps, in
addition to implementing a comprehensive economic package compiled
by the government and the ruling camp. Aso also notes: "I will
flexibly respond to the situation while maintaining the fiscal
reconstruction policy." This remark is to demonstrate his view that
the government's fiscal reconstruction goal of turning the primary
balance into the black in fiscal 2011 should be delayed later. On
the pension system, Aso does not specify how the consumption tax
should be treated, just saying: "I will promote national debate in
order to stably secure fiscal resources."

Yosano will announce his manifesto today. He intends to address the
task of allocating consumption tax revenues solely for social
security programs, in line with reviewing the income tax, the
corporate tax, and other issues, over the next three years. In his
blueprint, he notes he will submit a bill on a bold medium-term tax
reform program to the coming extraordinary Diet session.

4) Koike to announce candidacy today for LDP presidency; Tanahashi,
Yamamoto searching for ways to join efforts

NIKKEI (Page 2) (Excerpts)
September 8, 2008

Former Defense Minister Yuriko Koike has decided to officially

TOKYO 00002451 004 OF 009


announce her candidacy for the Liberal Democratic Party presidency
to determine the successor to Prime Minister Yasuko Fukuda. There
are no prospects for former Science and Technology Policy Minister
Yasufumi Tanahashi and House of Councillors member Ichita Yamamoto
to secure the necessary signatures of 20 party lawmakers. Given the
situation, the two lawmakers' camps are apparently searching for a
way to united behind a single candidate.

The race is likely to include at least five candidates, including
Secretary General Taro Aso, Economic and Fiscal Policy Minister
Kaoru Yosano, and former Defense Minister Shigeru Ishiba.

Koike told reporters last evening in Tokyo: "I have secured the
signatures of 20 lawmakers, so I would like to announce my candidacy
formally in a press conference on the 8th."

Former Policy Research Council Chairman Nobuteru Ishihara indicated
in a TV-Asahi program yesterday morning that he would include in his
campaign pledges a plan to reduce the numbers of Diet seats to 300
in the Lower House and 100 in the Upper House. He said: "A major tax
hike would be necessary unless we continue our efforts to cut
spending. It is necessary for us to make efforts to reduce the
number of Diet seats."

After the Fuji-TV program yesterday morning, Tanahashi informally
asked Yamamoto about the two joining their efforts. Yamamoto told
reporters around noon yesterday: "Two young reformers are eager to
run in the race, but coming up with a single candidate is not easy.
I would like to consult (with Mr. Tanahashi)." Tanahashi and
Yamamoto appear to have continued discussing the matter in Tokyo
last night.

5) New Komeito to reelect Ota as its representative on Sept. 23

NIKKEI (Page 2) (Excerpts)
September 8, 2008

The New Komeito is expected to reelect Akihiro Ota as its chief
representative in its party convention on Sept. 23. The party's
upbeat mood comes from Liberal Democratic Party lawmakers' need for
the organized votes of Soka Gakkai, a lay Buddhist organization
serving as the New Komeito's largest support base, in the next Lower
House election, which is expected to be an uphill battle for the
LDP.

In early August, before the latest cabinet shuffle, LDP executives
came up with a shocking projection based on their own data: the LDP
would not be able to garner 100 seats in the next Lower House
election without the support of the New Komeito and Soka Gakkai.

The LDP suffered a crushing defeat in the Upper House election last
summer under then Prime Minister Shinzo Abe who had succeeded
Junichiro Koizumi. The LDP's vote-gathering capability has visibly
declined due to postal privatization and a drop in public works
projects.

In last year's Upper House election, the New Komeito garnered 7.77
million votes in the proportional representation portion. Simply
dividing this figure by the 300 single-seat constituencies, this
meant that approximately 26,000 people voted for the New Komeito in
each electoral district. The figure carries great significance for
candidates running in hard-fought single-seat constituencies.

TOKYO 00002451 005 OF 009

"If the LDP does not unseat the prime minister, we will pull the
wires," a veteran New Komeito lawmaker said two months before Prime
Minister Yasuo Fukuda announced his resignation. The New Komeito
even threatened the LDP with an end to the coalition arrangement in
forcing the party to include a flat-sum tax cut in an economic
stimulus package. The fixed-sum tax cut focused on New Komeito
supporters brings to mind the old regional promotion tickets. The
LDP leadership was reportedly steamrolled by the New Komeito despite
the prime minister's order not to be at the beck and call of its
junior partner.

6) Ichiro Ozawa to win today in effect DPJ presidential election for
third term

SANKEI (Page 3) (Excerpts)
September 8, 2008

The main opposition Democratic Party of Japan (DPJ) will announce
today its presidential election, which will be held following the
expiration of the term of President Ichiro Ozawa. It is certain that
Ozawa will be reelected for his third term since no other candidates
are running in the race. The DPJ will officially reelect Ozawa in
its extraordinary convention on Sept. 21. The term of the LDP
presidency is two years.

Ozawa stressed in a meeting of the party's Lower House members held
yesterday in Utsunomiya City:

"I formed the government of Prime Minister Morihiro Hosokawa a dozen
or so years ago after leaving the Liberal Democratic Party (LDP),
but the government existed for a short period. I feel responsibility
for that. So I am now determined to form a government for the people
with your support."

Ozawa expressed his resolve to win the next Lower House election in
order to create a government-led by the DPJ.

7) DPJ's Kan unveils two revolutions, three reforms ahead of Lower
House election

TOKYO SHIMBUN (Page 2) (Full)
September 8, 2008

Democratic Party of Japan Deputy President, appearing on an NHK news
program yesterday, revealed a plan to draft the party's manifesto
centering on two revolutions and three reforms for the next Lower
House election.

As the two revolutions, Kan cited: (1) shifting the budget and
authority to local governments by abolishing the central agencies'
local bodies, such as the Land, Infrastructure and Transport
Ministry' regional development bureau; and (2) reducing the
bureaucracy's influence on the decision-making process to bring
greater transparency to it.

As to the three reforms, he reiterated the pledges from the party's
manifesto used for last year's Upper House election: (1) reform of
the social security system, including the pension program; (2) an
income-subsidy system for farmers; and (3) a child-support system
centering on a 26,000-yen child allowance.


TOKYO 00002451 006 OF 009


8) DPJ's Hatoyama says party will reject Diet deliberations on
supplementary budget

TOKYO SHIMBUN (Page 2) (Full)
September 8, 2008

Democratic Party of Japan Secretary General Yukio Hatoyama in a
press conference yesterday in the city of Aomori expressed a
negative view about discussing the fiscal 2008 supplementary budget
in the next extraordinary Diet session. He said: "Discussing
specifics would take a long time. It would be effective and faster
to carry out the next election at an early date to bring about a
change of government and implement our party's emergency economic
stimulus package."

Appearing on a Fuji TV program, Hatoyama also made this comment on
his party's response to the Diet in the event the next Lower House
election failed to bring about a change of government: "We will have
to deal with the situation more flexibly by respecting popular
will."

9) North Korea suspected of another abduction

SANKEI (Top play) (Abridged)
September 8, 2008

In 1998, a Japanese woman went missing in Ise, Mie Prefecture. This
woman is suspected of having been abducted to North Korea. This news
was brought to the government from sources familiar with relations
between China and North Korea, government sources revealed
yesterday. The woman is not on the government's list of abductees or
missing persons. Meanwhile, investigative authorities have decided
to reinvestigate her case as a possible abduction. They will ferret
out whether there was a suspicious ship near the place where she
went missing. The government's abduction taskforce also has this
information and is strongly interested in the case. This woman, if
she is confirmed to have been abducted, will be the 18th abductee.

North Korea's General Secretary Kim Jong Il has denied his country's
involvement in the abduction of Japanese nationals since 1985. If
the suspected abduction of this Japanese woman is true, North
Korea's claim will likely be undermined.

The woman is Noriko Tsujide, who was a 24-year-old resident of Tsu
City born in Miyazaki Prefecture and an editing reporter for Ise
Shima, a community magazine published in Ise City. Tsujide went
missing after leaving her office late at night on Nov. 24, 1998.

Mie prefectural police found out that Tsujide had a telephone call
from a male acquaintance and met him at a nonlife insurance
company's parking lot in the city of Ise. The police questioned him.
This man said, "I met her that night, but I don't know what happened
to her after she got out of my car." Her case has since been
unsolved.

Around the spring of this year, however, a government official
learned from a source connected to China-North Korea relations-who
is familiar with things in North Korea-that "a person by the name of
Noriko Tsujide might be in North Korea." On that occasion, that
Japanese government official never referred to her name, but his
counterpart gave her full name, according to informed sources.


TOKYO 00002451 007 OF 009


In the summer of 2006, there was information from a North Korean
defector claiming that he had seen a person who looks like Tsujide
in North Korea. A Japanese nongovernmental organization, however,
found out that it was a different person.

This time around, however, there was information from another
channel about the possible abduction of Tsujide. Mie prefectural
police and other authorities will therefore reinvestigate her case.

"It's strange that a person from a third country would know the name
of a person who is not designated even as an abductee or a missing
person." With this, a government official expressed concern about
her case.

10) Settlement of abduction issue now uncertain, with North Korea
putting off reinvestigation

YOMIURI (Page 2) (Full)
September 6, 2008

North Korea announced a plan to put off the reinvestigation it had
promised earlier to pin down the whereabouts of the Japanese
nationals abducted by its agents up until the new administration is
launched in Japan. Learning of this news, a number of Japanese
government officials voiced dissatisfaction and frustration
yesterday. On the Japanese government side, however, there is no
decisive countermeasure. Uncertainty is again looming over
development of the abduction issue.

State Minister for the Abduction Issue Nakayama severely criticized
North Korea's response, telling reporters in Tokyo yesterday: "I
would like to see the other side take a specific action to return
the abduction victims to Japan at an early date. North Korea has not
shown a sincere attitude in addressing the abduction issue."

Chief Cabinet Secretary Machimura also made this remark in a press
conference yesterday: "It is very regrettable. We will continue to
work on the North (to launch an early reinvestigation)."

Tokyo has agreed to partially lift or ease sanctions against
Pyongyang if it starts reinvestigating the issue.

After Prime Minister Fukuda announced his intent to step down, the
government also continued to urge the North to start the
reinvestigation, with Foreign Minister Koumura saying: "Japan will
deliver on its promise." But a government source surmised that North
Korea has decided to take a wait-and-see attitude for a while, based
on the view that Japan's foreign policy might significantly change,
depending on the outcomes of the upcoming Liberal Democratic Party
presidential race and the next House of Representatives election.

A senior Foreign Ministry official grumbled: "North Korea may not
take any action at least for the next three weeks" until the new
prime minister is elected." Vice Foreign Minister Ichita Yamamoto in
charge of affairs in the Asia-Pacific region, including North Korea,
resigned from his post yesterday to run in the LDP presidential
election, but the government has no intention to fill the vacated
post.

Meanwhile, in reaction to the U.S. government's delay in removing
the country from its list of terrorism-sponsoring nations, North
Korea has suspended the process of disabling its main nuclear

TOKYO 00002451 008 OF 009


facility in violation of an agreement reached in the six-party
talks. The North has even indicated a willingness to resume
operation of its Yongbyon reactor.

The government sees that the North's delay in the pledged
reinvestigation is not directly linked to its tough posture on the
nuclear issue, but a government source commented: "It is unable to
read what action North Korea will take next."

11) Nuclear subs need to discharge radioactive water: U.S.
documents

AKAHATA (Page 1) (Full)
September 7, 2008

In November 1964, a U.S. nuclear-powered submarine made a port call
in Japan for the first time. In those days, Japan negotiated with
the United States over the nuclear submarine's port call and
requested that the nuclear submarine not discharge primary cooling
water or any other radioactive substances in Japan's territorial
waters. However, the United States obstinately rejected the request.
This fact became known from declassified U.S. government documents
discovered at the U.S. National Archives. Shoji Niihara, a scholar
of international studies, obtained and analyzed these declassified
documents.

The declassified documents include telegrams between the U.S.
Embassy in Japan and the U.S. Department of States regarding
bilateral negotiations over Japan's acceptance of nuclear submarine
port calls in 1963 and 1964.

According to the documents, the Japanese government requested that
nuclear submarines not discharge any liquid or solid radioactive
substances in Japan's territorial waters without prior approval from
Japan's competent authorities.

The U.S. State Department, however, took the position that the
United States "regrettably cannot comply with the request, and the
State Department instructed the U.S. Embassy to answer that "it is
necessary to discharge a small amount of low-level radioactive
(cooling) water during the nuclear reactor's primary warm-up."

The Japanese government also asked the U.S. government to provide
data in order to check the safety of nuclear submarines. However,
the U.S. government rejected this request on the strength of
military secrets, maintaining that "all relevant data are
classified."

Concerning the discharge of radiation from U.S. nuclear-powered
submarines, it was brought to light early last month that the USS
Houston, a nuclear-powered submarine of the U.S. Navy, had continued
to discharge radiation for over two years during its port calls in
Japan. However, the documents discovered this time indicate that
U.S. nuclear submarines could have discharged radioactive substances
in Japanese waters over the past 44 years since the first port call
of a U.S. nuclear submarine in Japan. This problem is also concerned
with the nuclear-powered aircraft carrier USS George Washington's
scheduled deployment to Yokosuka in Kanagawa Prefecture.

12) Keidanren to agree on environmental tax, on condition of using
road tax revenues for that purpose


TOKYO 00002451 009 OF 009


ASAHI (Page 1) (Full)
September 6, 2008

The Japan Business Federation (Nippon Keidanren) has decided to
accept a plan to introduce an environment tax, although it had
opposed the idea. The business group will oppose introducing a new
tax that will lead to a heavier burden on companies but will call
for transforming such existing taxes as the gasoline tax and the oil
and coal tax into an environment tax. Keidanren will incorporate
this policy decision in a set of recommendations on tax reform due
out soon.

The proposed environment tax is intended to curb emissions of
environmentally harmful materials by imposing a tax on companies or
consumers discharging such materials. Revenues from the environment
tax may be used to finance environment-protection measures in some
cases.

As a measure to contain global warming, the Environment Ministry has
called since 2004 for introducing an environment tax on fossil fuel
such as oil, coal, and natural gas that discharge carbon dioxide.

Keeping the government's policy decision to free up road revenues in
mind, Keidanren intends to suggest in its recommendation report that
gasoline and other energy-related taxes be defined as those to be
imposed in accordance with the level of CO2 emissions and that their
revenues be used to fund environmental measures.

Although Keidanren had opposed using road tax revenues for other
purposes than highway construction and maintenance, it made a policy
switch following the Fukuda cabinet's decision in May to shift road
tax revenues to the general budget. The business group also kept in
mind the "action plan to create a low-carbon society" the Fukuda
cabinet released in July, which specified that the government will
review the tax system as a whole from the viewpoint of reducing CO2
emissions.

According to Keidanren, the total amount of tax revenues from
auto-related and other taxes for both central and local governments
reaches 10 trillion yen annually. The dominant view is that
"energy-related taxes are already excessive," as a senior member
said.

Now that a reduction in the gasoline tax is unlikely, Keidanren
appears to have concluded that it would be wise to approve
transforming existing taxes into an environment tax and avoid a new
environment tax.

ZUMWALT

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