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Cablegate: Daily Summary of Japanese Press 10/09/08

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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: DAILY SUMMARY OF JAPANESE PRESS 10/09/08

INDEX:

(1) Prime Minister Aso should tell U.S. of Japan's experience in
handling own financial crisis (Mainichi)

(2) Editorial: U.S., Europe should hastily pump capital into
financial institutions as follow-up for coordinated rate cuts
(Nikkei)

(3) Editorial: Refueling issue must not be used as bargaining chip
for Diet dissolution (Mainichi)

(4) Envisage what will come after post-Cold War era (Asahi)

(5) Senior LDP member: Lower House will be dissolved next January at
earliest (Sankei)

(6) Psychological war over Diet dissolution (Asahi)

ARTICLES:

(1) Prime Minister Aso should tell U.S. of Japan's experience in
handling own financial crisis

MAINICHI (Page 6) (Abridged)
October 9, 2008

By Atsuro Kurashige, a member of the Mainichi Tokyo Editing Bureau

Prime Minister Taro Aso has delayed the date of the dissolution of
the House of Representatives little by little. Some cleverly are
calling it the "inchworm Diet dissolution." I would like to present
Aso with two requests. One is to display leadership more in dealing
with the current global financial crisis by making use of Japan's
experience in handling its own post-economic bubble crisis. Another
is to hold an election quickly to recover the legitimacy of the
government, seriously taking the fact that his two predecessors
abruptly stepped down during their terms of office.

A number of senior Liberal Democratic Party members, some of whom
have even held one of the three party executive posts, have begun to
say that the LDP's mission has already ended. Among the LDP's
achievements were the choice to become a member of the Free World
during the Cold War period and the building of an affluent Japan
based on placing emphasis on economic growth. These were splendid
accomplishments. What remains as its sole raison d'etre is has been
its governing capability by skillfully maintaining its power by
pseudo-rotations of governments that made full use of the
bureaucracy. But former LDP Secretary General Koichi Kato has said:
"Despite that, twice in row (an administration walked off the job),
creating puiblic doubts about the party's governing capability."

At that time, the LDP should have gone to the electorate to renew
its mandate. Doing so is still necessary in principle. Recently,
however, the environment has changed with the U.S.-triggered
financial crisis. The Dow Jones Industrial Average has plunged below
the 10,000 mark, and the 225-issue Nikkei Stock Average has also
dropped below the 10,000 level. Asian and European markets have
reeled, too. A domino effect has set in and plunged the world into a
negative globalism. The real economy, as well, has begun to tumbled,
with sharp drops in exports and the production of everything from
Japanese cars, South Korean personal computers, to Chinese textiles

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as a result of Americans tightening their purse strings.

Politicians must take action now. There are tasks that must be
urgently tackled by the current administration as political crisis
management. This is a sort of a makeup test on its governing
capability. Governments in the world are urged to carry out market
intervention speedily and resolutely to end the vicious spiral of
plunging markets. The supplementary budget bill will surely clear
the Diet, helping out the domestic situation. But it is central that
the U.S. hammer out bold, drastic measures to eradicate the problem
areas in its own economy, from which the global financial crisis
started.

We should remember that Japan experienced a lost decade following
the bursting of the bubble economy in the 1990s and ending with the
revival of the nation's financial system around 2003. How did Japan
overcome the problem of asset deflation by which the economy lost
several hundred trillion yen with plunges in stock and land prices?
To rescue the dysfunctional financial system, the government earned
304 trillion yen in profits from interests over 14 years (based on
estimate by the Bank of Japan) from households based on low-interest
policy and then reorganized nearly 20 leading banks into three major
groups by investing 13 trillion yen in taxpayers' money into the
banks. Through these efforts, Japan was able to stop the negative
domino effect in the end.

The public was aware that those who benefited from the bubble
economy had to make strenuous efforts and pay the bill for the
bursting of the bubble by themselves. What is happening in the U.S.
is quite similar to the process in Japan. The original point in both
cases in Japan and the U.S. is the collapse of the myth that land
prices will continue to rise. Even so, the situation in the U.S. is
expected to become more serious from now. The economic rescue plan
taken in the U.S. recently is regarded as just "the third station
(on the mountain)," according to the Nikkei, when compared with
Japan's bailout measures. It is important that the U.S. find the
best way and timing for using public funds to contain the financial
crisis. Speedily restoring confidence will save the fate of the
global economy, in a sense.

In a meeting of finance ministers and central bank governors from
the Group of Seven Nations (G-7) to be held this weekend, Japan
plans to urge the U.S. to inject public funds to shore up the
capital base of ailing financial institutions, but that will not be
enough. The prime minister himself should call on state leaders to
jointly press President Bush to tap taxpayers' money. Only Japan has
had a similar experience. Any delay in taking action could lead to
collapsing the global economy. In this sense, Japan will be able to
make use of this rare opportunity to make its international
contribution.

To justify the Iraq war, President Bush cited the U.S. Occupation in
Japan as a successful experiment. He said that Iraq will become a
Western-type democratic nation under occupational administration by
the U.S., like Japan just after the end of the war. This is
analogical logic, completely ignoring Japan's unique imperial
regime. I felt that then Prime Minister Junichiro Koizumi did not
fulfill the responsibility of Japan as its ally to point out
President Bush's error.

How to treat relations with the U.S. will be a major campaign issue
in the next House of Representatives election. Of course, relations

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with the U.S. are the bedrock of Japan's diplomacy, but we are now
in an era in which both countries' leaders should say what they
should say to each other, premised that even the U.S. sometimes
makes a mistake. We should not just blindly follow the U.S.

The current administration's response to the ongoing financial
crisis is only temporary crisis management. It will become possible
for the administration to demonstration its full-scale ability to
govern for the first time after it is recognized as legitimate. The
sole way to do so is a judgment to be made by the voters in a
general election. The prime minister must agree to this view. He
should keep in mind that a pointless delay in the election will
result in damaging Japanese politics.

(2) Editorial: U.S., Europe should hastily pump capital into
financial institutions as follow-up for coordinated rate cuts

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

The world is facing a credit crisis. The benchmark Nikkei Stock
Average plummeted on October 8, closing at 9,203, down 952 points
from the previous day. This is the lowest level in five years and
three months. The yen alone is appreciating against the dollar and
the euro, temporarily testing 100 against the dollar. The U.S.
Federal Reserve Board (FRB) and five European central banks cut
interest rates in unison as an emergency measure.

The FRB, the European Central Bank and central banks of Switzerland
and Britain cut their policy interest rates by 0.5 PERCENT . China
and the UAE also cut their interest rates simultaneously. Rate cuts
joined by fast emerging countries are unprecedented. This is
apparently an effective move.

Even so, there is no change in the fact that the unstable management
of leading U.S. and European financial institutions, triggered by
the collapse of Lehman Brother, is the root cause of the crisis.
U.S. and European financial authorities should immediately inject
public money into battered financial institutions.

The financial crisis has spread throughout the world. Trading among
banks has become stagnant due to mutual distrust. Companies are
having difficulty procuring capital. The FRB plans to help companies
raise funds in exchange for unsecured commercial papers. Iceland,
which was hit by currency turmoil, has declared an emergency
situation. It will negotiate with Russia on its extending emergency
financing in order for the nation to make up for a shortage of
foreign currency reserves.

The growing observation that the U.S. and Europe will likely cut
interest rates has prompted investors' judgment that differences in
interest rates between those countries and Japan would narrow, which
has led to a further yen advance on the Tokyo market. As a result,
investors unloaded Japanese shares out of concern that
export-oriented companies' business performance would worsen,
causing the stock plunge.

The Bank of Japan (BOJ) did not join the concerted rate cuts.
However, it took a cooperative stance by boosting the money supply.
If monetary authorities of various countries indicate strong ties
for the stabilization of the economy, it would produce a certain
level of effects to stabilize the market.

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However, this is not enough to relieve financial uncertainties. The
only way to settle the situation is for industrialized countries and
rapidly emerging countries to deepen ties and decisively cut off the
root cause of the negative spiral. Top priority should be given to
regaining people's confidence in financial institutions by
alleviating their capital shortage.

Britain revealed financial stabilization measures, including the
injection of money totaling 50 billion pounds into leading banks,
such as Barclays and HSBC. The U.S. and other leading European
countries will follow suit. We want the U.S. to hastily boil down
concrete measures, including the application of the Emergency
Economic Stabilization Act to inject public funds into financial
institutions.

A meeting of finance ministers and central bank governors from the
Group of Seven Nations (G-7) must come up with convincing financial
stabilization measures in concert. Japan is responsible for taking
part in international cooperation more flexibly. The royal road to
stabilize the economy is to show a firm resolve to prevent the
financial market from falling into disorder.

(3) Editorial: Refueling issue must not be used as bargaining chip
for Diet dissolution

MAINICHI (Page 5) (Full)
October 9, 2008

The Diet is expected to pass during its current session a
government-introduced bill amending the new Antiterrorism Special
Measures Law-a time-limited law that is set to expire in January-to
extend the Maritime Self-Defense Force's refueling of U.S. and other
multinational force vessels in the Indian Ocean for another year.
This is because the leading opposition Democratic Party of Japan
(Minshuto), which is opposed to the legislation, has clarified its
intention to accept the idea of taking a vote on it at an early
date. The bill will be voted down in the opposition-controlled House
of Councillors. However, the ruling coalition of the Liberal
Democratic Party and the New Komeito is expected to take a second
vote in the House of Representatives to override the House of
Councillors' decision with two thirds of the seats.

The DPJ yesterday asserted that the legislation should be referred
to the House of Representatives Special Committee on Terrorism
without going through a plenary sitting of the House of
Representatives for a government explanation of the legislation and
a question-and-answer session. The DPJ is ready to accept the bill's
early passage. The DPJ is also said to have told the LDP that one
single day is enough for the special committee to deliberate on the
legislation.

The DPJ probably wants to prevent Prime Minister Aso and the LDP
from spending time on Diet deliberations and making an excuse for
delaying a dissolution of the House of Representatives. The DPJ's
aim is to drive the prime minister to dissolve the Diet for a snap
election.

Indeed, we want Prime Minister Aso to dissolve the Diet at an early
date. The DPJ, however, prioritizes its political jockeying over the
legislation's contents. This is like putting the cart before the
horse. Since last year, the DPJ has been standing against the MSDF's

TOKYO 00002817 005 OF 011


refueling activities in the Indian Ocean. As a counterproposal, the
DPJ has presented the Diet with its own antiterrorist bill that
features assistance activities on the ground in Afghanistan. The
DPJ-proposed legislation has been carried over to the current Diet
session.

Actually, instead of accepting the government bill's passage, the
DPJ should come up with points of contention in its counterproposal
to the government bill and then seek voter response.

Some people say the DPJ's advocacy of conducting activities in
Afghanistan is unrealistic, given the deterioration of public
security in that country. It would not have any merit to wrangle now
about how to assist Afghanistan... There may be such a judgment
behind the DPJ's argument for taking a vote at an early date.

Meanwhile, with a general election in mind, the LDP intends to
attack the DPJ over Afghan assistance. The LDP will likely try to
draw public attention to the war on terror as part of its political
strategy. The New Komeito was opposed to the idea of taking a second
vote on the refueling bill before the general election, but the
party is said to have changed its mind to favor it. In the public
eye, what was behind that is hard to see.

Due to discrepancy between the House of Representatives and the
House of Councillors, the ruling and opposition parties have been
poignantly at odds over the legislation of extending the MSDF's
refueling activities. The legislation has been tossed about in
politicking for the timing to dissolve the Diet. That is not the way
the legislation should be. Under a new government coming into office
with public confidence after the general election, the new ruling
and opposition parties should pursue an agreement without political
maneuvering. We want the ruling and opposition parties to stop
bargaining over antiterrorism in order to have a snap election. We
want them to make it a point of contention in their campaigns for
the general election. In addition, we would also like to make a
request concerning the government bill. Time and time again, we have
said any legislative measures for the SDF's overseas activities must
require Diet approval before sending SDF troops for overseas
activities in order to establish civilian control. The government
bill, however, continues the current antiterrorist law as is and
does not incorporate Diet approval. This is a serious flaw. Diet
approval, which was prescribed in the previous antiterrorist law,
should be restored.

(4) Envisage what will come after post-Cold War era

ASAHI (Page 15) (Abridged slightly)
October 9, 2008

By Jitsuro Terashima, chairman, Japan Research Institute

Many countries, including the United States, have fallen into the
syndrome of feeling that they have no choice but to do something.
Their mentality is that having come this far, there is no other
choice but to jointly prop up the markets, for that would be far
better than having a global recession. But is rescuing and
irresponsibly sharing the negative legacy while leaving the system
uncorrected the right thing to do? Bloated finance capitalism must
be called into question and reviewed severely.

The U.S. Congress has finally approved a bailout plan to buy

TOKYO 00002817 006 OF 011


nonperforming assets worth 700 billion dollars (approximately 70
trillion yen). Some seem to be relieved, but I feel profoundly
depressed when thinking of the enormous financial burden placed upon
the United States. The U.S. government will pump roughly 1 trillion
dollars into the financial market, including money to rescue two
mortgage giants and AIG. In addition, the Iraq war has cost the
country 1 trillion dollars. The total price tag comes to a whopping
2 trillion dollars, or 200 trillion yen.

The United States economy has been hit with huge military spending
and an excessive consumption society that are out of proportion to
the U.S.' industrial capacity. That has been made possible by a
system designed to guide capital into the country from around the
world. By skillfully using financial engineering, the United States
has turned even risks into objects of investment. The country has
created financial markets that are attractive to a whole range of
investments by developing a variety of unconventional financial
products. The money game under this system has been partially
supported by funds that flew out of Japan because of its ultra-low
interest rates.

The other day, I had a discussion with a financial source in New
York. When the topic turned to the definition of financial
engineering, he jokingly said: "It a technology to devise means to
lend money to people who are not entitled to it." Sooner or later,
such means will collapse. The subprime crisis is a natural
consequence.

There is no doubt that the post-Cold War paradigm, or the framework
of the times, has shifted. Since the end of the Cold War, the United
States has been referred to as the sole superpower or the global
empire with the predominant currency. It has been seven years since
the 9/11 terrorist attacks on the United States, and those
expressions no longer mirror the actual situation. Failure in Iraq
and the financial turmoil following the subprime crisis signify an
end to the post-Cold War era.

People say that the world has become multi-polarized. I think world
order is being created by all players. In this year's Lake Toya
Summit, the Group of Eight was not even able to set a direction for
resolving the environmental issue. We still clearly remember that
China, India, and African countries stood out during the summit.

I also noticed an interesting thing about the Beijing Olympics. A
total of 87 countries and regions won medals in the event. In the
past, the games were dominated by the United States and Soviet
Union. In the world of sports as well, the medals are shared by
athletes from all over the world.

In the post-Cold War era, Japan, based on the mentality to blindly
follow in the footsteps of the United States, has kept pace with
that country regarding events from the Iraq war to the subprime
crisis. As a result, it has become clear that Japan cannot get
through this period with excessive dependence and expectations on
the United States alone.

It can be said that Japan is now in an age of true globalization
after breaking out of its dependence on the United States. At the
same time, Japan must not get into "badger capitalism" as a result
of becoming overly inward-looking. It must reject "vulture
capitalism." Japan is required to have the capability to map out
rules on international order for all players.

TOKYO 00002817 007 OF 011

Japanese financial market is relatively more stable than those in
European countries and the United States. Given the situation,
Japanese financial institutions are making moves to invest in former
major Western investment banks or to by their departments. But in
view of risks associated with investing in the banks with murky
business prospects and the number of personnel capable of managing
international financial activities, such moves cannot be called the
right decision.

I believe that at this stage, Japan should reflect on the money game
of the past and search for ways to steer financial assets into
Japanese industries and technologies.

(5) Senior LDP member: Lower House will be dissolved next January at
earliest

SANKEI (Page 3) (Abridged slightly)
October 9, 2008

Following the rapid spread of the economic crisis, Prime Minister
Taro Aso is now being forced to substantially adjust his scenario
for dissolving the House of Representatives after the passage of the
supplementary budget for fiscal 2008. Should he create a political
vacuum by dissolving the Lower House amid the current global
financial crisis, he would not be able to avoid being criticized as
abandoning his administration. Since Aso has already instructed that
a second extra budget be drafted, the possibility is strong that
Lower House dissolution will be pushed back to next January or
later. Some in the New Komeito, which has called for the Lower House
dissolution before the end of the year, are unhappy about delaying
it. The move has shocked and shaken both the ruling and opposition
parties, which have already launched preparations for the election.
Aso has already been pressed to steer a difficult course in coming
out with appropriate economic and financial measures, while
resisting pressure from both camps.

Muneo Suzuki of the New Party Daichi called for an early Lower House
dissolution in a Lower House Budget Committee meeting yesterday
afternoon. The minute Aso received a memo from his secretary he
opened his eyes wide and said:

"Although it is important to ask for the people's vote of
confidence, I must consider the right timing. Stock prices fell
today, as well. How much? 9,252 yen ... As much as 900 yen dropped.
This isn't normal. Frankly speaking, Concern about the future of the
economy has spread even beyond my imagination. Appropriate measures
to stimulate the economy are definitely needed. The public would
agree that I should come up with more economic measures before
dissolving the Lower House. Given that, I need to make an extremely
tough decision on whether to dissolve the Lower House."

Aso's replay to Suzuki's question was taken as his declaration of
effectively putting off Lower House dissolution. Aso won the
presidential election of the Liberal Democratic Party (LDP),
advocating the need for an early Lower House dissolution and snap
election. He has now taken a cautious stance toward dissolving the
Lower House soon. The presence of LDP Election Strategy Council
Deputy Chairman Yoshihide Suga, a member of Aso's brain trust, has a
significant impact on his policy shift.

Soon after Aso delivered a policy speech on Sept. 29, Suga began to

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talk about "an idea of pushing back Lower House dissolution." The
LDP found in its pre-election survey that it would garner totaling
210 seats -- 145 seats in the electoral district competition and 65
seats in the proportional representation segment, but that it would
be difficult for the ruling coalition to secure a majority in the
Lower House even if the New Komeito won 30 seats. The results of the
poll made Suga worried.

Aso, meanwhile, has become increasingly nervous about the rapid
worsening of the global economy. Immediately after forming his
cabinet, Aso told Minister of Finance and State Minister for
Financial Services Shoichi Nakagawa: "The financial crisis appears
to be worsening faster than we expected. We must get moving. I'm
counting on you."

After that, Aso had adamantly refused to accept the ruling camp's
idea of dissolving the Lower House ahead of deliberations on a
supplementary budget for fiscal 2008. He then ordered that work
start on drawing up a second extra budget.

On the morning of Oct. 8, Lower House member Hirotaka Ishihara,
representing the Tokyo-3 district, was giving an outdoor speech in
front of a station in Shinagawa Ward, Tokyo. He has been delivering
a speech there every morning and evening since late August. He has
held small meetings in the evening. He set up an office for
campaigning on Sept. 20.

Like Ishihara, a number of ruling and opposition lawmakers are
becoming very frustrated. There was a rush of opening campaign
offices across the nation last week. More than 1 million yen is
needed to run one campaign office in the Tokyo Metropolitan.
Therefore, the delay of Lower House dissolution is a matter of life
and death for those lawmakers.

With an eye on the July 2009 Tokyo Metropolitan assembly election,
the New Komeito has demanded that the Lower House be dissolved
before the end of the year. New Komeito members are growing
dissatisfied with the delay. New Komeito Secretary General Kazuo
Kitagawa said yesterday in a meeting of the party's Lower House
members: "While closely watching effects of the U.S.-originated
financial turmoil, another economic stimulus package should be drawn
up late this year reforming the tax system. We also need to draft a
second extra budget, and compile a budget for fiscal 2009. One
senior New Komeito member complained:

"If the present situation continues, (the prime minister) may
dissolve the Lower House next January. He would not delay it beyond
January. Under the original plan, the Lower House should already
have been dissolved. Who is the stupid person who said that the
general election would be held on Oct. 26?

The main opposition Democratic Party of Japan (DPJ) has not budged
from its stance of stepping up pressure on the prime minister to
dissolve the Lower House quickly. There is a possibility that Aso
will be forced to dissolve the lower chamber before drawing up a
second extra budget if he fails to come up with an effective package
of economic measures.

On the night of Oct. 7, Aso took part in a meeting of senior LDP
Diet Affairs Committee members to give words of encouragement to
them. The meeting was held at a Chinese restaurant in Tokyo. Lower
House member Koichi Tani, imitating the proceedings of the Lower

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House plenary session, said: "I would like you to dissolve the House
quickly, omitting the remaining proceedings." Aso involuntarily
burst into laughter. What indeed was he thinking deep down inside?

(6) Psychological war over Diet dissolution

ASAHI (Page 4) (Abridged)
October 8, 2008

DPJ aiming to induce snap election

In the Diet, the House of Representatives Budget Committee staged a
main event yesterday, with the leading opposition Democratic Party
of Japan (Minshuto) having its three former presidents take the
floor and fire away at Prime Minister Aso. "Are you going to stay
on?" With this, the DPJ, which wants to prod the prime minister to
dissolve the House of Representatives for a general election at an
early date, provoked the prime minister. However, the prime minister
carefully kept ducking and weaving. They jabbed each other, while
dancing around the timing.

At the outset, DPJ Deputy President Naoto Kan, who was the first to
take the floor, asked a point-blank question: "You said things like
this shortly after becoming president of the Liberal Democratic
Party: 'We must resolutely battle the DPJ in the general election
and win. I can attain heaven's will only when we win the election.'
When is the general election?"

The prime minister avoided making it clear. Then, Kan asked if the
prime minister has given up "Heaven's will." He went on with his
provocative question: "You're going to stay on without a general
election, aren't you?" Kan advertised a roadmap in the DPJ's
manifesto for how to secure ways and means in order to grapple with
the financial crisis, saying: "It's important to implement policies
that will lead to domestic demand expansion. Our party's policies
will all lead to domestic demand expansion."

The DPJ's immediate challenge is how to induce the prime minister to
dissolve the House of Representatives. The opposition parties are
trying to drive the prime minister to dissolve the House of
Representatives. However, the right to dissolve the Diet is in the
prime minister's hands.

Following Kan, DPJ Vice President Katsuya Okada took the floor. In
the beginning, Okada called the Aso cabinet's legitimacy into
question. The prime minister underscored the need to fast-track
economic stimulus measures before dissolving the Diet. Okada said:
"Your cabinet has not appealed to the country yet. After an
election, you can consolidate your support base, and then you can go
ahead with fundamental financial policy measures."

DPJ Vice President Seiji Maehara also touched on Diet dissolution in
his question asking about the scale of freeing up the road-related
tax revenues. "I'd like you to take a look at the budget compilation
in December. That's all I can say." With this, the prime minister
dodged Maehara's challenge. Maehara rebutted, "I don't know if you
will dissolve the Diet or if you can compile the budget, but please
do not forget what you've said now."

Behind the battle of words, the DPJ is now edging on the prime
minister to dissolve the House of Representatives.


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"I can't say that's enough (for deliberations). However, we don't
want to put it off for nothing." So saying, Okada, a senior director
on the Budget Committee, implied the DPJ's readiness to take a vote
today on the supplementary budget. Asked whether the DPJ would
approve the extra budget, Okada answered: "It's insufficient in many
respects, but we don't have to vote against it."

Meanwhile, the government has now introduced to the Diet a bill
amending the Refueling Special Measures Law to extend the Maritime
Self-Defense Force's refueling activities in the Indian Ocean. The
ruling coalition wants to explain the proposed legislation tomorrow
in the Diet. The DPJ will accept it and will also respond to taking
a vote on the bill at an early date. For the time being, the DPJ's
strategy is to save the prime minister's face with its moderate
pursuit. "We are setting the stage (for the prime minister) to
dissolve the Diet," a DPJ executive recounted.

If the prime minister has made up his mind to dissolve the Diet
after extending the refueling law, it would be a plus to respond to
taking a vote on the legislation without wasting time and vote
against it... DPJ President Ozawa and other DPJ leaders are said to
have confirmed this course of action in their meeting on Oct. 6.

However, the DPJ is not sure of what is on the prime minister's
mind. Another DPJ executive said: "If the prime minister will not
dissolve the Diet (even after voting on the proposed legislative
measures), we will go all out in the Budget Committee over the
second extra budget. They can't hang in there until the year's end.
Everybody is about to run."

Premier looking for campaign issues

Provoked by the DPJ's Kan, Prime Minister Aso made an in-depth
statement about dissolving the House of Representatives.

"We will have to set campaign issues with the DPJ. There are many
issues, which include what to do about Japan's international
contributions, I think. We need to clear up these issues, and then
we should make clear which party is competent to take office."

This statement from Aso implied that he would like to dissolve the
House of Representatives over the advisability of continuing the
MSDF's refueling activities in the Indian Ocean. This is one of the
five issues from Aso's question to the DPJ in his recent policy
speech before the Diet. This unprecedented counter interpellation
was aimed to make clear the campaign issues in the general
election.

The DPJ will vote against the refueling bill in the House of
Councillors for a snap election. This is intended to have the ruling
coalition take a second vote in the House of Representatives and
override the upper chamber's decision. This could incur a public
backlash, but the prime minister will dissolve the Diet without
hesitation... The prime minister's aides think that way. Aso, before
becoming prime minister, used to reiterate: "I take it for granted
that we will take advantage of two-thirds (of the seats in the lower
chamber to override the upper chamber's decision in a second vote in
the lower chamber) when we've got to do so without delay for
national defense or diplomacy, because that is allowed under the
Constitution."

Now that the supplementary budget is expected to pass the lower

TOKYO 00002817 011 OF 011


chamber, the government and the ruling coalition are going to enter
into deliberations on the refueling bill and other legislative
measures, including relevant bills to establish the Consumer Affairs
Agency. In a cabinet ministerial conference yesterday, Aso suggested
the need for the government to take additional measures for domestic
demand expansion in particular, thereby indicating that he is
willing to compile a second extra budget. One of the prime
minister's aides said he would make clear the difference with the
DPJ by grappling with a number of issues. At the same time, the
prime minister seems to be exploring campaign issues.

SCHIEFFER

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