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Cablegate: Japanese Morning Press Highlights 12/17/08

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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: JAPANESE MORNING PRESS HIGHLIGHTS 12/17/08

Index:

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

Defense and security affairs:
4) Senior State Department official expresses hope that Japan will
contribute to Afghan reconstruction by sending civilians to assist
(Mainichi)
5) MSDF Aegis ship approved for being mounted with MD intercept
equipment, despite recent test failure (Nikkei)
6) Under unofficial ROE, ASDF assigned to Iraq were allowed to
return fire if C-130 had emergency landing and was in danger (Tokyo
Shimbun)
7) Government view that use of weapons by SDF against pirates in
waters off Somalia would be constitutional (Asahi)

8) ESTA: Despite visa waiver, Japanese traveling to U.S. would be
rejected unless prior approval obtained by Internet (Sankei)

Economy:
9) Mid-term tax program draft will contain mention of consumption
tax hike in 2011 as Prime Minister Aso wanted (Yomiuri)
10) New Komeito objects to inclusion of consumption tax hike mention
in tax program (Mainichi)

Political agenda:
11) Last days of the current Diet session finds atmosphere tense
between ruling and opposition camps (Tokyo Shimbun)
12) Democratic Party of Japan decides to put off planned filing of
censure motion against the prime minister (Tokyo Shimbun)
13) Cabinet minister Amari in interview sees possibility of early
cabinet shuffle (Tokyo Shimbun)
14) New Komeito unhappy with surprising remark by LDP election chief
Koga seen as rejecting election cooperation between the two parties
(Mainichi)

Articles:

1) TOP HEADLINES

Asahi & Mainichi:
Keidanren reluctant to hike wages, weakens job-security policy

Yomiuri & Sankei
Government's mid-term program specifies consumption tax hike in
fiscal 2011

Nikkei:
Government to curb social security spending by 20 billion yen in
real terms as result of reduced amount covered by reserves

Tokyo Shimbun:
Rules of engagement for ASDF operations in Iraq specify weapons-use
procedures on assumption of emergency landing

2) EDITORIALS

Asahi:
(1) Enact employment bills in current Diet session
(2) Countries must make efforts to move WTO negotiations forward

TOKYO 00003427 002 OF 010

Mainichi:
(1) Tax reform: Concealing tax increases an act deception
(2) Introduction of compensation system for obstetric patients a
step forward but contains many problems

Yomiuri:
(1) Deepen debate on making 18 the age of majority
(2) Policy on spring wage offensive: Labor and management should try
to overcome difficult situation

Nikkei:
(1) Labor and management should step up efforts to improve labor
market
(2) Discuss safety net in the event 18 is made age of majority

Sankei:
(1) Spring wage offensive: Labor and management must cooperate for
job security
(2) Take steps to upgrade moral education

Tokyo Shimbun:
(1) Keidanren's reluctant stance about hiking wages unhelpful
(2) New Thai government urged to settle conflict among people

3) Prime Minister's Official Residence (Kantei)

Prime Minister's schedule, December 16

NIKKEI (Page 2) (Full)
December 17, 2008

09:01
Attended a cabinet meeting. METI Minister Nikai stayed on.

10:57
Met at the Kantei LDP Policy Research Council Chairman Hori, his
deputy Sonoda, road-related revenues general spending project team
chair Tanigaki, and MLIT Minister Kaneko.

11:56
Had a lunch with LDP first-term lawmakers in the presence of Deputy
Chief Cabinet Secretary Matsumoto. Chief Cabinet Secretary Kawamura
joined in.

13:11
Met High Energy Acceleration Research Organization Professor
Emeritus Makoto Kobayashi in the presence of MEXT Minister Shionoya.
Afterward met Japan Association of National Universities Chairman
Komiyama and Federation of Japanese Private Colleges and
Universities Associations Chair man Anzai.

13:58
Met Economic and Fiscal Policy Minister Yosano and Assistant Chief
Cabinet Secretary Fukuda.

15:01
Met Ocean Policy Research Foundation President Akiyama, followed by
Cabinet Councilor Toyoda, in the presence of Vice-Foreign Minister
Yabunaka, Vice METI Minister Mochizuki, in the presence of Deputy
Vice-Minister Ishige.


TOKYO 00003427 003 OF 010


16:03
Met Reform Club Representative Watanabe and others, followed by
Moroccan Ambassador to Japan Lecheheb in the presence of MHLW
Minister Masuzoe. Afterward, met Kawamura.

17:01
Attended a Council on Economic and Fiscal Policy meeting.

17:34
Met Kawamura, followed by Finance Minister Nakagawa, Vice Finance
Minister Sugimoto and Budget Bureau Director General Tango.

18:33
Met Defense Parliamentary Secretary Takeda and others.

19:08
Met senior vice ministers in the presence of Kawamura, Matsumoto and
Konoike.

20:59
Met Matsumoto at an Imperial Hotel bar.

23:33
Returned to his private residence in Kamiyamacho.

4) Senior U.S. official expresses hope for Japan's civilian
contributions to Afghanistan

MAINICHI (Page 2) (Abridged slightly)
December 17, 2008

Masaya Oikawa, Washington

Department of State Japan Desk Director Daniel Russel held a press
conference at the Foreign Correspondents' Club in Washington on Dec.
15. Touching on Japan's contributions to Afghanistan, he expressed
hope for the dispatch of civilians in such areas as police,
construction, education, and medical services. Given the incoming
Obama administration's clear indication that it will put high
priority on Afghanistan, there is a possibility that further
contributions from Japan will become a focal point.

Regarding Japan's future contributions, Director Russel said: "The
United States and Japan are continuously discussing the matter. What
is necessary depends on Afghanistan's needs rather than what is
requested by the United States." He also indicated that the dispatch
of civilians in a wide range of fields must be discussed, citing
police officers, construction workers, teachers and nurses as
specialists needed in Afghanistan.

5) MSDF authorizes Aegis intercept system

NIKKEI (Page 2) (Full)
December 17, 2008

The Maritime Self-Defense Force has now authorized an intercept
system with the Standard Missile 3 (SM-3) mounted on its
Aegis-equipped destroyer Chokai, MSDF Chief of Staff Keiji Akahoshi
told a press conference yesterday. In November, the MSDF failed in
an intercept test off Hawaii. "There was no problem with the ship's
system," Akahoshi said.


TOKYO 00003427 004 OF 010


6) ASDF anticipated returning fire after emergency landing

TOKYO SHIMBUN (Top play) (Full)
December 17, 2008

The Air Self-Defense Force, which conducted airlift activities in
Iraq under a law for special measures to assist with Iraq's
reconstruction, had set weapons use guidelines in its rules of
engagement (ROE), sources revealed yesterday. In other words, the
ASDF had anticipated case where its cargo planes, which are supposed
to have flown in 'noncombat areas,' were shot down and could no
longer fly. This shows a discrepancy between the law and the actual
activities.

The ROE were laid down in November 2003 before the Self-Defense
Forces' Iraq dispatch. It stipulated what to do after a C-130
transport plane's emergency landing, anticipating a case where the
plane is surrounded or plundered.

In the case of an emergency landing, ASDF crew members are not
allowed to use weapons if they are only surrounded. The ROE allows
them to use weapons if and when they or their aircraft is endangered
and they have no choice but to break through the encirclement. In
the case of pillage after an emergency landing, the ROE allows ASDF
members to use weapons when they feel endangered even if the enemy
has no weapons.

The ROE also anticipate a case where ASDF members find it impossible
to defend their aircraft even by returning fire. In this case, the
ROE stipulate that the ASDF crew should give up their cargo plane
and evacuate.

The Iraq Special Measures Law stipulates SDF activities in
"noncombat areas." Regarding airlift activities in Iraq, the
government has explained that air routes and airports are noncombat
areas. However, the ROE go so far as to anticipate even a case where
an ASDF C-130 transport is downed and comes under attack after its
emergency landing.

In the ASDF's actual airlift activities in Iraq, the C-130's alarm
was often activated against potential attacks from shoulder-launched
missiles over Baghdad.

Former ASDF Chief of Staff Tadashi Yoshida told the Tokyo Shimbun
after his retirement: "If you can show the noncombat area on a map,
that's all right. But we don't know which part is a noncombat area
and which part is not. That doesn't go with the world of pilots."
With this, Yoshida showed a gap with the government's account.

7) Weapons use against pirates constitutional: gov't

ASAHI (Page 4) (Full)
December 17, 2008

The government, now studying measures (to protect Japanese tankers
and other commercial ships) against pirates that are rampant in
waters off the coast of Somalia, has released a view allowing the
Self-Defense Forces to use weapons in order to crack down on pirates
there. The government says the SDF's use of weapons for that purpose
does not fall under the constitutional prohibition of Japan from
using armed force overseas. However, the pirates in the offing of
Somalia are armed with rockets and other weapons. Moreover, the

TOKYO 00003427 005 OF 010


pirates are organized. The SDF's use of weapons against armed
pirates will therefore likely result in a full-fledged battle with
them. There are many challenges in store, such as what to do about
guidelines for weapons use or the rules of engagement (ROE).

In a meeting yesterday of the House of Representatives Security
Affairs Committee, former Defense Agency Director General Gen
Nakatani, a House of Representatives member of the ruling Liberal
Democratic Party, interpellated the government about constitutional
problems. Tsuneyuki Yamamoto, director general of the Cabinet
Legislation Bureau First Department, replied: "In case an order has
been issued for maritime security operations, SDF personnel's use of
weapons within the bounds of the Policemen's Duty Performance Law
does not conflict with Article 9 of the Constitution." The
government's interpretation is that launching an attack against "a
state or a state-like organization" falls under the constitutionally
prohibited use of armed force but the SDF's use of weapons against a
private group of pirates cannot be called unconstitutional. In case
the defense minister issued an order for maritime security
operations, SDF personnel-as well as police officers-are allowed to
use weapons if and when those believed to be vicious criminals
resist.

However, the current maritime security operations are to be
conducted in order to protect the lives and assets of Japanese
nationals. The Defense Ministry deems it difficult to conduct
maritime security operations against pirates that attack foreign
vessels. The government and a nonpartisan group of lawmakers are
therefore looking into the option of creating a special measures law
for antipiracy activities off Somalia or a permanent law to crack
down on piracy.

8) New ESTA system requires visa-waiver visitors to obtain online
pre-approvals starting next month

SANKEI (Page 3) (Excerpts)
December 17, 2008

The U.S. government will require Visa Waiver Program visitors coming
to the U.S. to register online before entering the U.S. Those
without the pre-approval document are likely to be refused entry
into the country. But many Japanese tourists seem to be still
unfamiliar with the introduction of the new program, although only
less than one month is left before it will be launched. The
Scheduled Airlines Association of Japan, composed of domestic
airlines, is trying to spread the information.

The U.S. will introduce the Electronic System for Travel
Authorization (ESTA) as part of measures to prevent terrorists from
entering the nation. The Visa Waiver Program has allowed Japanese
visitors to go to the U.S. for tourism or business purposes for up
to 90 days without a visa. But the new system will require such
visitors to get pre-approval through online procedures.

Domestic airlines intend not to let passengers with no pre-approval
document board a plane once the new program is launched. This is in
order to avoid any trouble after the passengers arrive in the U.S.

In principle, visitors should comply with online procedures on their
own. They are required to enter such details as their name, passport
number, and whether or not they have a criminal record. The
application should be submitted at least 72 hours before departure.

TOKYO 00003427 006 OF 010

9) Sales tax hike in fiscal 2011 stipulated in mid-term government
program

YOMIURI (Top Play) (Excerpts)
December 17, 2008

The government on December 16 presented to the Council on Economic
and Fiscal Policy, chaired by Prime Minister Aso, a mid-term program
for drastic reform of the tax code, which stipulates its policy of
raising the consumption tax in fiscal 2011. The panel unanimously
approved the proposal. The program mentions that drastic reform of
the tax code, including the consumption tax, will be implemented in
stages between fiscal 2011 and fiscal 2015 for the establishment of
a sustainable fiscal structure. The government will aim at having
the program adopted at a cabinet meeting by the 24th, when a
government plan for the fiscal 2009 budget is slated to be approved.
However, coordination of views with the ruling parties, which are
strongly opposing the idea of mentioning the timetable for raising
the tax rate, is bound to encounter complications.

The government plan stresses its intention to use increased tax
revenues as stable funding resources for social security spending.
It also stipulates the timetable for the proposed hike, with
economic recovery as the premise. The program also notes that
legislative measures needed to hike the consumption tax will be
taken in 2010.

Gist of mid-term government program

? Implement in stages drastic reform of the tax code, including the
consumption tax, between fiscal 2011 and fiscal 2015.
? Make a comprehensive approach, including consideration into
multiple tax rates.
? Take legislative measures in 2010
? Use increased revenues for social security benefits and measures
for the declining birthrate
? Revise the structure of the income tax system from the perspective
of correcting the social disparities
? Lower the corporate tax in order to strengthen companies'
international competitiveness
? Secure stable funding sources in fiscal 2011 to finance a hike in
the state contribution to the basic pension to 50 PERCENT and make
it a permanent measure.

10) New Komeito certain to object to government's medium-term
program; LDP likely to be caught between government and New Komeito;
Ruling bloc's project team to meet today; Prime minister might lose
his grip on ruling parties

NIKKEI (Page 2) (Abridged slightly)
December 17, 2008

The government has presented a medium-term fundamental tax reform
program with a consumption tax hike in fiscal 2011 in mind.
Following this development, the ruling bloc will hold the first
meeting today of its project team (PT) to study the medium-term
program. The program is certain to draw fire from the New Komeito,
which is concerned about the program's possible negative impact on
the next Lower House election. The Liberal Democratic Party will
likely be torn between the government and the New Komeito.
Difficulties in coordinating views could further reduce Prime

TOKYO 00003427 007 OF 010


Minister Taro Aso's grip on power.

Doubts about Yosano

LDP Policy Research Council Chairman Kosuke Hori around noon
yesterday asked former Finance Minister Fukushiro Nukaga to chair
the PT. Nukaga agreed to assume the post on the condition he be
given full initiative in running the PT, saying, "Someone has to do
it."

The PT consists of about eight persons, including tax and social
security policy officers of the LDP and New Komeito. The PT
chairman's post has been declined by a number of senior LDP Tax
Commission members. They apparently did not want to have "pull the
chestnut out of the fire" in the expected clash between the
government and the New Komeito.

The ruling parties have unveiled a tax reform outline for fiscal
2009 that did not specify the timing to raise the consumption tax
rate. But the prime minister still publicly declared that the
government would hike the sales tax in fiscal 2011. Economic and
Fiscal Policy Minister Kaoru Yosano, who has reportedly given Aso a
positive push, telephoned PT members after yesterday's Council on
Economic and Fiscal Policy meeting to tell them, "Although the
contents is the same as the ruling bloc's outline, new figures have
been added." In a press conference as well, Yosano explained, "There
is nothing that runs counter to the spirit of the outline."

But the path to fundamental tax reform mentioned in the government's
plan is the same expression as that presented by the LDP in a ruling
bloc tax reform council meeting that failed to obtain the New
Komeito's endorsement. "Is there any guarantee that the economy will
pick up in fiscal 2011?" a senior New Komeito member said. In the
party, there are doubts about Yosano, with one saying: "Mr. Yosano
plans to cause a crack to open between the LDP and New Komeito over
the medium-term program that could lead to a grand alliance between
the LDP and the (opposition) Democratic Party of Japan."

Party-head talks

Criticism is simmering in the LDP, with former Secretary General
Hidenao Nakagawa saying: "It is irresponsible to speak only of a tax
hike without presenting what should be done, such as turning around
the economy and cutting salaries of civil servants." At the same
time, there is a view in the party that if the prime minister's
leadership suffers another setback, it would take a devastating toll
on the party in next Lower House election.

New Komeito Chief Representative Akihiro Ota said in a press
conference yesterday: "Given the prime minister's statement, it is
important for the ruling parties to discuss the matter thoroughly to
arrive at a smooth conclusion." One senior LDP member noted: "There
is no other option but to settle the matter in the end through
party-head talks."

11) Administrative Reform Minister Amari: Cabinet shuffle a possible
choice to boost Aso administration's popularity

TOKYO SHIMBUN (Page 2) (Full)
December 17, 2008

In an interview to the Tokyo Shimbun, Minister of State for

TOKYO 00003427 008 OF 010


Administrative Reform Akira Amari stated: A shuffle of the cabinet
of Prime Minister Aso and the lineup of the Liberal Democratic Party
executives "is one of the choices to boost the Aso administration's
popularity. I think there should be a dream team that would tackle
the difficult situation of a century by appointing bigwigs who are
policy experts to a new cabinet."

Amari talked about the current cabinet lineup: "The cabinet was
formed based on the premise of a dissolution of the House of
Representatives. It is not a full-scale cabinet for making
policies."

However, he admitted that that Prime Minister Aso probably had no
intention to shuffle his cabinet and the LDP leadership.

12) DPJ forgoes filing censure motion against Prime Minister Aso

TOKYO SHIMBUN (Page 2) (Full)
December 17, 2008

The Democratic Party of Japan (DPJ), the largest opposition party,
decided yesterday to forgo submission of a censure motion against
Prime Minister Taro Aso to the current extraordinary session of the
Diet. The decision was revealed by a senior DPJ Upper House member.

The DPJ has judged that rather than to boycott deliberations on the
budget bill, it would be wiser for it to pursue contradictions in
the fiscal 2008 second supplementary budget during the next regular
Diet session, which is scheduled to be convened on Jan. 5. This
decision takes into consideration the low support ratings of the Aso
cabinet in the polls.

13) Final stage of current Diet session in tense situation;
Opposition camp intends to steamroll vote on employment bills,
ruling coalition desperate to cap criticism for inability to devise
new measures

TOKYO SHIMBUN (Page 2) (Full)
December 17, 2008

The ruling coalition is reacting strongly against the main
opposition Democratic Party of Japan's (DPJ) stance of not
hesitating to steamroll a vote on Dec. 18 in the House of
Councillors Committee on Health, Labor and Welfare on a set of four
employment measures bills. The DPJ, the Social Democratic Party
(SDP) and People's New Party (PNP) jointly submitted the bills to
the Upper House. With the closing day of the ongoing Diet session
approaching, maneuvering between the ruling and opposition camps is
now intensifying.

Referring in an executive meeting yesterday to the bills, DPJ Diet
Affairs Committee Chairman Kenji Yamaoka said: "We will not hesitate
to take a forced vote for the sake of the people."

The DPJ is expected to hold on Dec. 18 a rally together with the SDP
and PNP calling for an early passage of the bills. The party also
plans to hold a meeting of the leaders of the three parties in order
to play up their solidarity.

At a press meeting yesterday, Liberal Democratic Party (LDP) Upper
House Diet Affairs Committee Chairman Seiji Suzuki expressed his
anger at the opposition's such moves, arguing: "I think the Upper

TOKYO 00003427 009 OF 010


House may change from the chamber of wisdom to the seat of darkness.
I feel the Upper House is in danger."

The opposition camp submitted the bills to the Upper House on Dec.
15, only ten days before the end of the ongoing Diet session and
then referred them to the committee just two hours after that.

The ruling bloc is angry because the opposition forced the taking of
a vote on the measures in the committee on Dec. 18 without giving
any explanations of them (according to Suzuki).

However, the ruling bloc gave the opposition a chance to criticize
the government for being unable to devise any appropriate measures
to cope with the situation, even putting off submitting a second
supplementary budget for fiscal 2008.

As such, LDP decided yesterday in a liaison meeting to bolster a
public relations campaign on the government's emergency employment
measures, with Secretary General Hiroyuki Hosoda saying: "We will
carry out a public relations activity to explain the public the
contents of the emergency package." The LDP is now desperately
trying to cap the criticism that the government is unable to come up
with any appropriate measures.

14) New Komeito shows displeasure with Koga statement: Could become
yet another source of friction

MAINICHI (Page 5) (Excerpts)
December 17, 2008

Liberal Democratic Party (LDP) Election Committee Chairman Makoto
Koga's statement referring to a possible revision of the party's
election cooperation with New Komeito on December 16 has created a
stir in the ruling camp. Many members of the New Komeito and Soka
Gakkai, the party's power base, expressed displeasure. One senior
member even telephoned Koga to ask what he meant. Secretary General
Hiroyuki Hosoda hurriedly tried to put the uproar to rest, saying,
"He just stated his own view." However, Koga's statement could
become yet another source of friction between the LDP and the New
Komeito.

Koga on December 15 suggested that the LDP might rethink its current
election cooperation setup with the New Komeito, under which LDP
candidates cooperate with New Komeito in proportional representation
in return for their receiving support from New Komeito in
single-seat constituencies. Referring to his statement, Koga on the
16th told reporters: "The LDP must do its best in the proportional
representation system as well. It is important both for the LDP and
the New Komeito to garner more votes."

Behind Koga's statement is a sense of alarm at the present state the
LDP is facing, including a sharp decline in public approval ratings
for the Aso cabinet. One senior party official said, "In recent
national elections, 20 PERCENT -30 PERCENT of LDP supporters did
not vote for candidates endorsed by the LDP." Few believe that the
Koga statement will accelerate moves to rethink cooperation with the
New Komeito. However, he certainly voiced the true feelings of many
LDP members -- they want cooperation from the New Komeito, but there
is no room for them to hand over votes in proportional
representation.

Prime Minister Taro Aso at a meeting with senior vice ministers from

TOKYO 00003427 010 OF 010


each government agency on the evening of the 16th said, "I heard
that Mr. Koga said that the LDP can win the election if it cuts ties
with the New Komeito." Two senior vice ministers of the New Komeito
were present at the meeting, but they kept silent.

Many New Komeito members were perplexed at the Koga statement with
one noting, "Soka Gakkai members, who have thus far supported LDP
candidates because they had no choice but to do so, may say that
they will not support the LDP any more." A senior Soka Gakkai member
expressed displeasure: "An appropriate person in the LDP must
properly reject the Koga statement."

SCHIEFFER

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