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Cablegate: Japanese Morning Press Highlights 09/09/08

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UNCLAS SECTION 01 OF 09 TOKYO 002460

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 09/09/08

Index:

Election season LDP:
1) Yomiuri poll: 43 PERCENT of public want lower-house election as
soon as possible; LDP support rate steady at 29.7 PERCENT , but
DPJ's slips 1.8 points to 16.9 PERCENT (Yomiuri)
2) Yosano, Koike declare they are running in the LDP presidential
race, but Yamamoto drops out, unable to gather enough backers
(Yomiuri)
3) Former Prime Minister Mori, wanting to be kingmaker, backs Taro
Aso in the LDP presidential race (Yomiuri)

Election season - DPJ:
4) Ichiro Ozawa declares candidacy for DPJ presidency for 3rd time,
running unopposed, promises to make the DPJ the ruling party
(Yomiuri)
5) The upcoming lower-house election is seen as Ozawa's last chance
to lead a party to victory and grab the reins of government
(Nikkei)
6) Some members of the DPJ still fuming that Ozawa will be reelected
without a vote (Yomiuri)
7) Ozawa's policy pledges include cut in existing budget but lack
specifics on where necessary revenues will come from (Yomiuri)
8) Ozawa targets small election districts in nationwide campaign,
expects to win in a majority of them (Nikkei)

9) LDP presidential candidates set to attack Ozawa's political
approach and DPJ campaign pledges (Tokyo Shimbun)

10) Japan goes along with the ban on nuclear exports to India but
the decision was a hard one to make (Yomiuri)

11) METI's new energy strategy spotlights tax cuts to encourage
capital investment that will save energy (Yomiuri)

12) Japan Business Federation (Nippon Keidanren) calls for a 10
PERCENT consumption tax by fiscal 2011 (Yomiuri)

Articles:

1) Poll: 43 PERCENT call for snap election at earliest possible
time

YOMIURI (Page 2) (Abridged)
September 9, 2008

Some 43 PERCENT of the public would like the House of
Representatives to be dissolved as soon as possible for a general
election, the Yomiuri Shimbun found from its recent face-to-face
nationwide public opinion survey conducted Sept. 6-7. "Within this
year" accounted for 27 PERCENT , and a total of 70 PERCENT thought
that the general election should take place by the end of this year.
In the wake of Prime Minister Fukuda's abrupt announcement of his
resignation, an increasing number of people want a snap election,
the survey shows.

In the poll, respondents were asked what they thought about Fukuda's
sudden announcement of his resignation. To this question, 71 PERCENT
said he was "irresponsible." In the breakdown of public support for
political parties, however, the ruling Liberal Democratic Party
remained almost flat at 29.7 PERCENT , down only 0.8 percentage
points from last month. This shows that the LDP's support rate was

TOKYO 00002460 002 OF 009


not markedly affected by Fukuda's announcement of his resignation.
The public is apparently trying to find out developments in the
LDP's presidential election. Meanwhile, the leading opposition
Democratic Party of Japan (Minshuto) was at 16.9 PERCENT , down 1.8
points from last month.

Respondents were also asked who they thought would be most
appropriate among ruling and opposition lawmakers for prime
minister. To this question, LDP Secretary General Taro Aso, who will
run in the LDP race, scored 30.6 PERCENT , followed by former Prime
Minister Koizumi at 11.8 PERCENT and DPJ President Ozawa at 9.6
PERCENT . Aso rose from 24.7 PERCENT in last month's survey and
remained most popular. Former Defense Minister Yuriko Koike, who is
expected to run for LDP presidency, was at 4.7 PERCENT (1.0 PERCENT
in last month's survey). Former LDP Policy Research Council
Chairman Nobuteru Ishihara was at 4.1 PERCENT (0.9 PERCENT in last
month's survey) and Economic and Fiscal Policy Minister Kaoru Yosano
at 1.8 PERCENT (0.4 PERCENT in last month's survey). All were up
from last month, showing the effects of the LDP's presidential
race.

The survey was conducted of 3,000 persons chosen from among the
nation's voting population, and answers were obtained from 1,835
persons (61.2 PERCENT ).

2) Yosano, Koike announce candidacies for LDP presidential race

YOMIURI (Page 1) (Slightly abridged)
September 9, 2008

Economic and Fiscal Policy Minister Kaoru Yosano,70, and former
Defense Minister Yuriko Koike, 56, officially announced yesterday
their candidacies for the Sept. 22 presidential election of the
ruling Liberal Democratic Party (LDP) at the party's headquarters
respectively. House of Councillors member Ichita Yamamoto, however,
revealed the press corps yesterday his intention to give up running
in the presidential race. Since Yasufumi Tanahashi, former science
and technology minister, has yet to secure 20 recommendations, the
LDP presidency will be contested by five candidates -- Koike,
Yosano, Secretary General Taro Aso, former policy chief Nobuteru
Ishihara and former Defense Minister Shigeru Ishiba.

Koike told reporters:

"The key word is reform. I want to change the system of Japanese
society and implement politics from the viewpoint of the public,
while preserving tradition, family ties and the solidarity of
community."

Koike is the first Japanese woman to seek the LDP presidency.

Yosano, meanwhile, said revealed the he would set drastic tax system
reform, including a consumption tax hike, as a administrative
concept. He said:

"I would like to gain public understanding not only for the
consumption tax but also for the overall tax system. We should not
give optimistic and misleading ideas to the public."

Ishiba yesterday came up with a policy of establishing a permanent
law enabling Japan to dispatch the Self-Defense Forces overseas
whenever necessary instead of the New Antiterrorism Special Measures

TOKYO 00002460 003 OF 009


Law that allows the Maritime Self-Defense Force to carry out its
refueling operation in the Indian Ocean.

3) Mori to back Aso

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

Former Prime Minister Mori, a supreme advisor to the ruling Liberal
Democratic Party's Machimura faction, clarified in a general meeting
of the faction yesterday that he will support LDP Secretary General
Taro Aso, who belongs to the Machimura faction, in the LDP's
forthcoming presidential election.

The meeting was held after former Defense Minister Yuriko Koike,
also belonging to the Machimura faction, announced her bid for the
LDP presidential election. One of those who attended the meeting
quoted Mori as saying: "Do you know what impuku (ritual suicide
conducted in secret) is? As I talk to you now, I'm prepared to quit
Seiwaken (Machimura faction). This time, we will not support anyone
as a faction. As an individual, I will support Mr. Aso."

Meanwhile, former LDP Secretary General Hidenao Nakagawa, one of the
Machimura faction's leaders, is standing behind Koike in the party
race. "She has put her political career on the line," Nakagawa said
in the meeting. "So," Nakagawa went on, "there will be some people
who will support her as comrades, and that's understandable to me."
The difference between Mori and Nakagawa, who are the Machimura
faction's leaders, is now clear, and the faction could therefore
split.

4) DPJ President Ozawa reelected third term; "I will do my best to
take the country's political helm," he says

YOMIURI (Page 1) (Full)
September 9, 2008

Ichiro Ozawa was reelected yesterday uncontested for his third term
as president of Democratic Party of Japan (DPJ). The 66-year-old
Ozawa expressed, at a press conference held at the party's
headquarters, his determination to put all his energy into taking
over the reins of government in the next House of Representatives
election. He stated:

"I will do my best on the assumption that it is my last chance to
put an end to the Liberal Democratic Party-led government and
realize politics and government that places priority on the daily
lives of people."

The DPJ will hold an extraordinary party convention on Sept. 20 in
Tokyo to formally reelect Ozawa as its top leader. Ozawa will be
serving in his post for two years until September 2010. He is
expected to retain Deputy President Naoto Kan, Secretary General
Yukio Hatoyama and Azuma Koshiishi, chairman of the LDP caucus in
the House of Councillors, in their respective posts.

At the press meeting, Ozawa revealed that he would begin a
nationwide stumping tour on Sept. 9 for the next Lower House
election and announce the party's first officially picked candidates
before the end of this week. He said:

"Since a dissolution of the Lower House and consequent general

TOKYO 00002460 004 OF 009


election are imminent, I will do my utmost to prepare for them. We
will win a majority of the single-seat constituencies by all
means."

Ozawa revealed a set of administrative concepts that will serve as a
basis for a set of campaign pledges (manifesto) that the DPJ will
announce in its campaign for the next Lower House election. He
said:

"I will create a Japanese-style safety net system in such fields as
pension, medical services, child-rearing, employment, the
agriculture, forestry and fisheries industries, and small- and
mid-sized enterprises. I will also completely change the nation's
system of government so that the people can participate in politics.
I will secure fiscal resources for this system."

5) Ozawa sees next Lower House election as last chance for change of
government

NIKKEI (Page 2) (Full)
September 9, 2008

Democratic Party of Japan President Ichiro Ozawa in a press
conference yesterday expressed his strong resolve to win the next
Lower House election. He said: "I will make utmost efforts, thinking
it is the last opportunity to put an end to LDP-led politics and
realize our party's vision of a people-oriented politics and
administration."

Fifteen years have passed since he left the LDP. Touching on this
fact, Ozawa said: "(The next election) will be the culmination of my
life."

He also described Prime Minister Yasuo Fukuda's abrupt decision to
step down as a golden opportunity for change of government, saying:
"Many people have come to realize that the long LDP administration
has not brought happiness to them."

The view is spreading in the party that Ozawa intends to risk his
political life.

6) DPJ President Ozawa to speed up coordination on candidates for
Lower House election

YOMIURI (Page 2) (Excerpts)
September 9, 2008

Democratic Party of Japan (DPJ) President Ozawa, who has been
reelected to a third term, intends to speed up coordination on the
party's candidates for the next House of Representatives election,
as well as the selection of the party executive lineup. However,
there is smoldering frustration among DPJ lawmakers toward Ozawa's
reelection to another term uncontested while the presidential
election of the ruling Liberal Democratic Party (LDP) is drawing
attention. The question is whether Ozawa will be able to make
adequate preparations to seize power. This is his real challenge.

Ozawa, at a press conference yesterday, stressed: "I will be
officially reelected on Sept. 21 (at the party's convention). But I
will fulfill my duty without making any political vacuum and do my
best to prepare for a general election."


TOKYO 00002460 005 OF 009


Amid the Fukuda cabinet's slump in the polls, the largest opposition
party has gained confidence that it can win the next Lower House
election. With Fukuda's abrupt announcement of his resignation, all
eyes are now fixed on the LDP presidential race. Therefore, the view
is gaining ground in the DPJ that the trend of opinion has slightly
changed.

The DPJ initially had planned to contest the Lower House election by
playing up the need for political change, grilling the government
and ruling coalition over soaring prices and the issue of poisoned
Chinese-made frozen dumplings at the upcoming extraordinary Diet
session. However, the ruling camp is now coordinating a timetable
for a dissolution of the Lower House election in early October. On
this point, as well, the DPJ's calculation has been off.

At yesterday's press meeting, Ozawa underscored his concern, saying:
"I have continued to say on various occasions that we cannot win the
Lower House election on the mood alone. The situation is very
difficult."

7) Ozawa's plan for DPJ administration emphasizes budget cuts for
existing projects but lacks specifics about fiscal resources

YOMIURI (Page 11) (Excerpts)
September 9, 2008

Democratic Party of Japan President Ichiro Ozawa was reelected for a
third term without a formal vote yesterday. The blueprint for a new
administration he unveiled yesterday emphasizes the need to
significantly cut current expenditures in order to squeeze out
fiscal resources to implement his major policy plans. But more than
15 trillion yen will be needed to realize the plans. Given this,
unless he presents specific spending cuts by the time of the next
House of Representatives election, he will unavoidably be criticized
as a profligate spender.

The blueprint incorporates measures to create a system to give
income support to individual farmers and to provide households with
up to 26,000 yen per month as a child care allowance until a child
graduates junior high school. Most of the measures in his blueprint
were in the party's manifesto for the House of Councillors election
in 2007, but other measures, such as a system to offer income
support for individual fishing households, are in the manifesto, so
the amount of needed financial resources is likely to be larger than
the 15.3 trillion yen estimated at the time of the 2007 Upper House
election.

In a press conference yesterday, Ozawa said regarding fiscal
resources: "Many allocations have been used for other purposes than
their initial ones, and (in the government's budget) there are items
that we think are unnecessary." He stressed that he would boldly cut
wasteful spending and expenditures for existing projects that the
DPJ places low on its list of priorities.

Ozawa said: "Public highway maintenance and improvement has been
carried out to a considerable extent," indicating that he would
significantly reduce the highway budget.

However, many government officials take a cool view about Ozawa's
blueprint, with a senior Finance Ministry official commenting:
"There are a lot of budgetary allocations that cannot be slashed,
such as those to redeem national bonds and to pay social insurance

TOKYO 00002460 006 OF 009


benefits. It will be difficult to cut more than 15 trillion yen."

An attempt to discontinue existing projects will inevitably evoke
protest from the industries and voters who benefit from the
projects. Some DPJ members, keeping such a possibility in mind,
might oppose Ozawa's idea, and debate in the party might eventually
heat up.

8) DPJ gearing up for Lower House election

NIKKEI (Page 2) (Excerpts)
September 9, 2008

Democratic Party of Japan President Ichiro Ozawa sealed his third
term unopposed yesterday. The party will now gear up for the next
Lower House election that might follow the dissolution of the Lower
House at the outset of the next extraordinary Diet session to be
convened on Sept. 24. In a press conference yesterday, Ozawa
stressed the party's target of winning a majority in the Lower House
that holds 300-single seats. The DPJ is aiming to become the largest
party in the lower chamber, while the Liberal Democratic Party is
eager to turn around the situation via its leadership race and the
installation of a new prime minister.

In the press conference held at party headquarters, Ozawa played up
the party's stance to unanimously make preparations for the next
Lower House election. Immediately after the press conference, Ozawa
discussed the party's election measures with Secretary General Yukio
Hatoyama and other executives. After the meeting, he headed for a
photo-shoot session for campaign posters.

Starting today, Ozawa is scheduled to resume his nationwide
political tour to visit constituencies in which the party has yet to
determine its candidates. Ozawa said to his aide last evening: "I
will devote myself to the nationwide tour and campaigning. You have
to see the secretary general regarding other matters."

The party's Upper House Caucus Chairman Azuma Koshiishi, too,
explicitly said to reporters yesterday that his party would focus
its attention on campaigning for the next election. The party is
scheduled to assemble its Upper House proportional-representation
members on Sept. 10 to build a solid cooperation system to obtain
the cooperation of support organizations.

Ozawa also told the news conference yesterday that he would renew
the party leadership and the shadow cabinet in a way that can win
public trust through the next election.

Deputy President Naoto Kan, Secretary General Hatoyama, and Upper
House Caucus Chairman Koshiishi are likely to retain their posts.
Some in the leadership think Ozawa will also retain Kenji Yamaoka as
Diet Affairs Committee chairman. Amid such speculations, Ozawa
intends to consider giving posts to individuals who can draw much
attention.

The DPJ's extra efforts for the next election come from the
likelihood that the LDP will restore its popularity after the next
general election the change over of the prime minister. A DPJ
lawmaker predicted that if the next prime minister dissolves the
Lower House soon after the convocation of the next Diet session by
taking advantage of his popularity, it would be difficult for the
DPJ to become the largest party, overtaking the LDP's place.

TOKYO 00002460 007 OF 009

As such, the party will move up the time to determine the fist batch
of its official candidates from within September to this week. The
party will also increase the number of its official candidates from
about 150 to over 200 to aim at garnering more than 150 single
seats. But given a lack of preparedness, Ozawa indicated in the
press conference difficulty attaining the target under the current
situation.

9) LDP presidential candidates set to attack Ozawa's political
approach and DPJ campaign pledges

TOKYO SHIMBUN (Page 2) (Abridged slightly)
September 9, 2008

How are the candidates running in the LDP presidential race going to
deal with Democratic Party of Japan President Ichiro Ozawa, who has
won a third term, in the next Lower House election? Major candidates
have played up their confrontational stances toward Ozawa's
political approach to apply pressure on the Ozawa-led DPJ ahead of
the next election.

Secretary General Taro Aso, who is regarded as the frontrunner in
the presidential race, in a speech on Sept. 6 played up his ability
to counter Ozawa, saying: "The next LDP president will have to lock
horns with Mr. Ozawa. That has to be taken into consideration in
selecting the new LDP president." He also criticized the DPJ's
presidential election without a vote, saying: "A party that does not
allow members to throw their hats in the ring to run in the race is
strange." Aso indicated that once elected LDP president, he would
attack Ozawa's heavy-handed approach to politics.

Former Policy Research Council Chairman Nobuteru Ishihara, too,
zeroed in on Ozawa's political style, saying to reporters yesterday:
"Some members expressed their eagerness to run in the race, but they
were not able to do so. I am certain that they are now wondering why
their party did not carry out an election."

Economic and Fiscal Policy Minister Kaoru Yosano in a press
conference indicated that he would focus on problems in the DPJ
manifesto for the next Lower House election presented by Ozawa.
Yosano said: "In view of fiscal resources, most plans are difficult
to implement. The party needs to spell out how it intends to raise
the funds."

Former Defense Minister Yuriko Koike, who was at Ozawa's side in
launching the now-defunct New Frontier Party, praised Ozawa, saying:
"I was able to learn many things from him. He is the best at dealing
with politics." At the same time, Koike expressed a willingness to
hold a debate with Ozawa on security policy, over which the DPJ is
split, noting: "I will have the public make a decision on the
concreteness and feasibility of the DPJ's policies, especially in
the security field."

Former Defense Minister Shigeru Ishiba, on a commercial TV program,
also indicated that he would pursue Ozawa on security, saying: "The
DPJ has pronounced the Maritime Self-Defense Force's refueling
mission in the Indian Ocean unconstitutional. That is strange."

10) Japan makes tough decision to support lifting nuclear embargo on
India


TOKYO 00002460 008 OF 009


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

The Nuclear Suppliers Group (NSG), a 45-member international body
overseeing its members' nuclear technology exports, has now reached
a consensus to waive its embargo on nuclear reactors and nuclear
fuel to India, a non-signatory to the Nuclear Nonproliferation
Treaty (NPT). Japan, which is also an NSG member, is now in a
complicated position. Japan joined in the international consensus.
However, Japan has insisted on stepping up the NPT regime while
upholding its policy of pushing for nuclear disarmament. Japan's
approval of the NSG's decision this time is contradictory in part to
that nuclear disarmament policy.

Chief Cabinet Secretary Machimura, meeting the press yesterday, said
Japan has "decided from a comprehensive perspective" to join the
consensus on the exceptional waiver of nuclear trade with India.
Machimura said the nuclear trade waiver would help India promote
nuclear power generation and cut greenhouse gasses. He added that
India has agreed with the International Atomic Energy Agency to let
the IAEA inspect that country's nuclear facilities and that this
safeguards agreement will increase its nuclear activities'
transparency.

Japan has called for the NPT regime to be enhanced in an aim to
limit the nuclear powers to the United States, Russia, Britain,
France, and China. However, such an effort could lose its
persuasiveness. "North Korea and Pakistan may also tell us to allow
them to have nuclear weapons," said Hirofumi Tosaki, chief
researcher at the Japan Institute of International Affairs.

11) Revised economic strategy report propose tax cuts for
investments in energy-conservation facilities

YOMIURI (Page 2) (Excerpts)
September 9, 2008

The Ministry of Economy, Trade and Industry (METI) yesterday
unveiled draft revisions to its report titled "new economic growth
strategy" for Japan to sustain its economic growth despite recent
soaring resource prices. The report includes measures to reduce
taxes for companies' capital investment in energy-conservation
facilities. It also suggests the need to press major companies to
raise wages, aiming to boost households' buying power. METI will
seek approval for the revised report in a cabinet meeting today. The
ministry wants to have the report reflected in the government's
annual economic and fiscal policy guidelines due out next summer.

Based on the view that the Japanese economy is faced with severe
problems due to soaring resource prices, leaving Japan mired in a
sense of helplessness, METI concluded that it is necessary to add
more measures to overcome the steep rise in prices. The ministry
aims to encourage companies and households to promote investment for
conserving energy and resources, as well as to expedite exports to
resource-supplying countries and emerging countries.

The revised version stresses that Japan should aim to become a
country rich in natural resources by making use of solar power. It
also includes major tax-cut measures to allow multiple companies to
jointly introduce an energy-conservation facility.

12) Keidanren to call for raising consumption tax to 10 PERCENT in

TOKYO 00002460 009 OF 009


fiscal 2011

YOMIURI (Page 2) (Full)
September 9, 2008

The Japan Business Federation (Nippon Keidanren) decided yesterday
to call on the government to raise the consumption tax from the
current 5 PERCENT to 10 PERCENT in fiscal 2011 as a medium-term
reform of the tax system. After the plan is formally decided by the
chairman and vice chairman, the business group will announce the
plan, possibly later in September.

In Chairman Fujio Mitarai's vision released in January 2007,
Keidanren proposed hiking the consumption tax to 10 PERCENT in two
stages by 2015. Based on its recent estimate, however, the business
group concluded that in order to maintain the current medical,
pension and other social security systems, the consumption tax
should be raised at one stroke at an earlier date than scheduled.

Keidanren set forth the government's plan to return the nation's
primary balance to the black in fiscal 2011 as a precondition for
stable growth of the Japanese economy. It also thinks it is
necessary to take measures to reduce the burden on middle-income and
lower earners in order to mitigate the blow to individual consumers
from the consumption tax hike.

Specifically, Keidanren intends to incorporate tax cuts for families
with small children and tax cuts for middle-income and lower earners
worth several trillion yen.

ZUMWALT

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