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Cablegate: Japanese Morning Press Highlights 12/19/08

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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 12/19/08

Index:

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

Defense and security affairs:
4) Government considering options for Iraq following troop pullout,
including indirect PKO assistance, with future SDF dispatches ruled
out (Nikkei)
5) GSDF lost secret document about VIP transport schedule at July
G-8 summit in Hokkaido (Yomiuri)
6) Defense Ministry in second supplementary budget request plans to
seek funding for alternate weapon to replace cluster munitions
(Asahi)
7) Defense Ministry balks at opposition call for allowing senior
staff officers to testify in Diet about Tamogami incident (Asahi)
8) Agreement at Japan-Australia 2-plus-2 meeting to share classified
information (Mainichi)

9) Document proves former Aso Mining Co. forced foreign POWs during
WWII to work in its coal mines (Asahi)

10) Government to accept 30 Burmese refugees (Mainichi)

11) Bank of Japan ready to implement easing of quantitative monetary
restrictions, including purchasing of commercial paper (CP)
(Yomiuri)

Political frenzy:
12) Diet in turmoil as Democratic Party of Japan (DPJ) steamrolls
labor legislation through Upper House (Mainichi)
13) Ruling camp refuses party heads meeting fearing it would turn
into an attack on its labor policy (Yomiuri)
14) New Komeito showing signs of flexibility in battle with LDP over
tax program (Mainichi)

Articles:

1) TOP HEADLINES

Asahi:
Komazawa University head director dismissed over massive investment
losses

Mainichi:
DPJ throws Diet into turmoil as it forces employment bills through
Upper House

Yomiuri:
BOJ mulls monetary-easing policy, including purchase of CP

Nikkei:
Individual investors to be net buyers of Japanese stocks in 2008 for
first time in 18 years

Sankei:
Prime minister willing to designate education as national strategy
to create new domestic demand

Tokyo Shimbun:
Toyota likely to post deficit for first time in about 50 years

TOKYO 00003453 002 OF 010

Akahata:
JCP Chairman Shii calls on Keidanren to urge leading companies to
stop or withdraw mass dismissal

2) EDITORIALS

Asahi:
(1) Switch to omni-directional diplomacy, set off by SDF withdrawal
from Iraq
(2) 30th anniversary of openness policy in China: Political reform
urged for

Mainichi:
(1) Collapse of job market: Government doing nothing
(2) Restrictions on child pornography: Strengthen crackdown by
police

Yomiuri:
(1) Improvement in school textbooks: Teachers also should hone
skills
(2) Deepen security cooperation between Japan and Australia

Nikkei:
(1) Take every possible measure to improve job market
(2) Large-scale output reduction reflects oil-producing countries'
irritation

Sankei:
(1) Nanjing Massacre Memorial Hall: Removal of photos in question
result of diplomatic efforts
(2) Shortage of doctors: Take more measures, besides review of
training system

Tokyo Shimbun:
(1) Political parties must implement employment measures by year's
end, instead of criticizing each other
(2) OPEC policy of output cuts: Japan should continue to pursue
alternative energy

Akahata:
(1) Government must urge U.S. to discontinue low-altitude flights

3) Prime Minister's Official Residence (Kantei)

Prime Minister's schedule, December 18

NIKKEI (Page 2) (Full)
December 19, 2008

09:01
Attended an Education Rebuilding Council meeting at the Kantei.
Afterward met LDP Election Strategy Council Deputy Chairman Suga.

10:30
Met Consumer Affairs Minister Noda, followed by Vice Foreign
Minister Yabunaka.

12:47
Met National Association of City Assemblies Chairman Fujita and
National Association of Chairmen of Town and Village Assemblies
Chairman Hara.

TOKYO 00003453 003 OF 010

13:16
Met Osaka Gov. Hashimoto and Kansai Economic Federation Chairman
Shimotsuma in the presence of Lower House member Chuma.

14:07
Met Australian Foreign Minister Smith and Defense Minister
Fitzgibbon in the presence of Assistant Chief Cabinet Secretary
Hayashi and others, followed by Assistant Chief Cabinet Secretary
Fukuda. Afterward met Vice Finance Minister Sugimoto.

15:10
Met Science and Technology Minister Noda and biotechnology strategy
promotion government-private council chairman Honsho and others.

16:03
Met UNHCR Guterres in the presence of Hayashi. Afterward met Cabinet
Intelligence Director Mitsuya.

17:07
Met Internal Affairs and Communications Minister Hatoyama and
Internal Affairs and Communications Ministry Administrative
Management Bureau Director General Hashiguchi. Afterward met ruling
party financial market trend project team chairmen Yanagisawa and
Ueda, followed by Economic and Fiscal Policy Minister Yosano and
Fukuda.

17:59
Met Foreign Ministry North American Affairs Bureau Director General
Nishimina.

18:30
Had a telephone conversation with Israeli Prime Minister Olmert in
the presence of Foreign Ministry Middle Eastern and African Affairs
Bureau Director General Suzuki and others.

19:29
Met at an Akasaka Japanese restaurant with LDP Election Strategy
Council Chairman Koga, former METI Minister Hiranuma, former Foreign
Minister Koumura, and former defense chief Kyuma. Talked to his
secretary.

22:58
Returned to his private residence in Kamiyamacho.

4) Gov't mulls indirect support for PKOs, groping for post-Iraq
role

NIKKEI (Page 2) (Abridged)
December 19, 2008

Following the Air Self-Defense Force's pullout from Iraq, the
government is now coordinating to expand Japan's support for the
roles of developing countries in United Nations peacekeeping
operations as a new plan for its international contributions.
However, the Diet is divided with the ruling parties holding a
majority of seats in its lower chamber and the opposition parties
dominating its upper chamber. As it stands, it will be difficult to
send the Self-Defense Forces right away on a new overseas mission
since that will require a new law. The government is still groping
for a post-Iraq role.


TOKYO 00003453 004 OF 010


The government is planning to expand its backup of developing
countries to help with their PKO personnel training programs. Last
year, Japan began its financial support to PKO training centers in
six countries, including Egypt and Malaysia. The government is going
to expand its financial support of the PKO centers in a total of 8-9
countries next fiscal year.

Japan has been providing funds to PKO centers overseas through an
international organization to help improve their PKO competence.
This can be called indirect support to areas where Japan cannot send
SDF troops due to its five principles of PKO participation.

In addition, the government will also expand its training programs
for Japanese nationals who will work in post-conflict countries to
help with their reconstruction. They are professionals mainly in
medical, educational, and administrative areas. They are in their
20s and 30s, but the government will consider those in their 50s and
60s as well. The government will recruit 10 older people next fiscal
year, who will receive training at a facility in Japan.

The government will now focus on such assistance due to Japan's own
circumstances. The United Nations hopes that Japan will send SDF
troops for full-fledged participation in PKO missions. However,
there are no prospects for that.

In October, Japan sent two SDF officers to the headquarters of the
United Nations Mission in Sudan (UNMIS) in the southern part of
Sudan. So far, however, Japan has sent a total of 30 persons,
including those in the Golan Heights and in Nepal. Japan ranks 79th
in the world and is lowest among the Group of Eight (G-8).

In addition to PKOs, Japan will continue its refueling activities in
the Indian Ocean. However, Western countries are now focusing their
attention on operations to mop up terrorist groups in Afghanistan. A
senior official of the Foreign Ministry sees Japan's refueling
mission there as the "minimum requirement." The Foreign Ministry
thinks that the refueling activities alone are a far cry from being
enough. "We will have to do something for Afghanistan," one of the
ministry's officials said.

What is additionally on the agenda is dispatching SDF troops to
Afghanistan and sending Maritime Self-Defense Force vessels to crack
down on pirates off Somalia.

In June, the government sent a fact-finding team to Afghanistan. The
government produced a report on its team's findings there. However,
the government gave up on the option of sending SDF troops to
Afghanistan due to the deterioration of public security in that
country. Meanwhile, the government, as well as the ruling and
opposition parties, is studying antipiracy measures. However, it
will not be easy to get new legislation through the Diet that is
divided.

5) GSDF lost classified Lake Toya VIP transport documents

YOMIURI (Page 39) (Full)
December 19, 2008

Two Ground Self-Defense Force helicopter unit members lost during
the July Lake Toya Summit some secret summit documents, including
VIP transport lists, it has been learned. The loss of the documents
came to light after the summit. The documents were found in the two

TOKYO 00003453 005 OF 010


members' lockers through a search. The Defense Ministry will take
punitive measures against the two members before long.

To be punished are a 44-year-old captain and a 35-year-old sergeant
1st class of the 12th helicopter unit of GSDF Camp Soumagahara
(Shinto Village, Gunma Prefecture) who where involved in drafting
the documents. They are expected to be punished with a one-month pay
cut.

According to a GSDF source, the loss of the documents became clear
in late July. Becoming aware that the retention period for the
documents was over, the helicopter unit asked that the 1st
helicopter group at Camp Kisarazu (Kisarazu, Chiba Prefecture) that
took charge of the VIP transport return the documents in question so
that the unit could begin a set of procedures to discard the
document. But the 1st helicopter group was not able to find the
documents or records showing that it had received them from the
helicopter unit.

The GSDF conducted a search, and found them in a sealed envelope in
the locker of the 35-year-old sergeant 1st class in early August.
The 44-year-old captain was supposed to directly hand the documents
to the 1st helicopter group. But instead, he asked the sergeant 1st
class to do so, and the sergeant 1st class never handed them to the
1st helicopter group.

6) Defense Ministry to request cluster alternatives in 2nd extra
budget

ASAHI (Page 4) (Full)
December 19, 2008

In the wake of the government's signing of a treaty banning cluster
munitions that scatter numerous smaller submunitions or bomblets,
the Defense Ministry decided yesterday to earmark alternative
weapons in its second supplementary budget request for the current
fiscal year (through March next year). The ministry had initially
planned to incorporate alternative weapons in its budget estimate
for next fiscal year. The second extra budget request for such
weapons is estimated at around 4.9 billion yen.

7) Defense Ministry refuses to summon SDF brass hats

ASAHI (Page 4) (Full)
December 19, 2008

The Defense Ministry yesterday gave reasons in written form to the
House of Councillors Foreign Affairs and Defense Committee for its
refusal to comply with the opposition bench's demand to summon the
Self-Defense Forces' Joint Staff Office Chief Takashi Saito and
other SDF echelon officers to the Diet. The opposition parties have
called for their summons due to former Air Self-Defense Force Chief
of Staff Toshio Tamogami's publication of a controversial essay.

The Defense Ministry reasons: 1) SDF staff officers will have to be
occupied in doing Diet affairs and the SDF's daily operations could
be troubled; 2) military issues involve confidentiality, and they
cannot give adequate replies without sufficient security; and 3) SDF
members, when hearing SDF staff officers' replies before the Diet,
may not be able to fully understand what their commanding officers'
parliamentary replies mean, which could become a problem from the
aspect of commanding.

TOKYO 00003453 006 OF 010

8) Japan-Australia 2-plus-2: Agreement reached on indirect support
for Obama and holding talks on sharing classified information

MAINICHI (Page 2) (Abridged slightly)
December 19, 2008

The governments of Japan and Australia held yesterday their foreign
and defense ministers meeting (two plus two) at the Foreign
Ministry's Iikura Guesthouse. In view of advanced international
cooperation, the two countries agreed to conduct full-fledged
discussions on sharing classified information on the threat of
terrorism and disaster relief. They also shared the importance of
keeping the dialogue between Japan, the United States and Australia
in the Asia-Pacific regions, with the incoming Obama administration
in mind.

Except for the United States, Australia is the only country with
which Japan takes a two-plus-two from in discussing matters. This is
the second two-plus-two between Japan and Australia following the
one in June last year. From Japan, Foreign Minister Hirofumi
Nakasone and Defense Minister Yasukazu Hamada attended the meeting.
The meeting was intended to play up the two countries' stance as
U.S. allies to indirectly support President-elect Obama, who has
announced to increase the troop level in Afghanistan and to urge the
Untied States to maintain strong influence over East Asia, including
the North Korean issue.

After the meeting, the two countries released a joint statement and
a memorandum of understanding by defense authorities that included:
(1) begin talks in 2009 on establishing a legal framework to share
classified information; and (2) mutual visits by naval vessels and
patrol planes.

9) Presence of 300 POWs at former Aso Kogyo mentioned in MHLW
wartime documents

ASAHI (Page 37) (Abridges slightly)
December 19, 2008

During the war, there were some 300 foreign POWs at a coal mine of
the former Aso Kogyo (Fukuoka Prefecture) run by a relative of Prime
Minister Taro Aso, it became clear yesterday through documents kept
at the Health, Labor and Welfare Ministry. In response to foreign
media reports on the existence of POWs at the coal mine, the prime
minister has said: "The facts have not been confirmed." But now that
the government documents have been found, his accountability will be
called into question once again.

The documents, dated August 15, 1945, note that at Aso Kogyo's
Yoshikuma mine prison camp, there were 197 Australian, 101 British,
and two Dutch soldiers, and that two of the Australians died in July
1945. The documents have been kept at the MHLW. The ministry offered
the reply in response to an inquiry from Yukihisa Fujita of the
Democratic Party of Japan.

The question of POWs at Aso Kogyo was taken up by the New York Times
in November 2006. Using the website of its Consulate General in New
York, the Foreign Ministry has rebutted the report, but the rebuttal
was deleted on Dec. 17, saying that the situation has now changed.
Aso Kogyo eventually became Aso Cement, where Prime Minister Aso
served as president.

TOKYO 00003453 007 OF 010

10) Japan to accept Burmese refugees starting in fiscal 2010

MAINICHI (Page 2) (Full)
December 19, 2008

The government has decided to accept about 30 Burmese refugees who
currently are being sheltered in Thailand, under a recent agreement
to introduce the so-called third-country refugee resettlement
program. It will select refugees to be accepted before the end of
fiscal 2009 in cooperation with the Office of the United Nations
High Commissioner for Refugees (UNHCR). Japan is the first Asian
country that accepts refugees under the third-country refugee
resettlement program. The plan will be formally adopted at a refugee
measures liaison and coordination meeting to be held on December 19,
joined by representatives from 11 government agencies.

Unlike the Immigration Control Law, under which screening for
recognizing refugees can be held only in Japan, the third-country
refugee resettlement program allows screening interviews to be held
in countries where refugees are sheltering.

The government will accept families of refugees whom the UNHCR
interviewed in advance and recommended as being capable of adapting
themselves to life in Japan. It will provide Japanese language
training, job training and referral services as assistance for
refugees to settle in Japan. It intends to accept more, while
determining the situation. It appears that the government has
decided to accept Burmese refugees, because about 60 PERCENT of
applicants for refugee recognition were Burmese.

According to the UNHCR, the number of refugees accepted under the
agreement in 2007 is 75,300. Fourteen countries accepted them. The
U.S. accepted 48,300. Refugees are mainly from such countries as
Burma and Somalia.

11) BOJ to introduce quantitative monetary easing, including CP
purchases

YOMIURI (Top Play) (Almost full)
December 19 2008

The Bank of Japan (BOJ) at its policy-setting meeting on December 18
entered final coordination on the possibility of introducing de
facto quantitative monetary easing. It appears that as part of
assistance for companies' cash management, it is looking into
various measures, including purchases of commercial papers, which
companies issue for short-term fund procurement. Following the rapid
deterioration of the domestic economy, the BOJ will introduce
measures to further ease the money supply, switching its focus from
the interest rate level to the monetary supply quantity. In the
meantime, it will confer on the possibility of lowering the policy
interest rate, which it is guiding on the very low level of 0.3
PERCENT a year.

Rate cut also considered

The BOJ will reach a final decision at its policy-settling meeting
to be held on the 19th, following the one on the 18th. The U.S.
Federal Reserve Board (FRB) on the 16th came up with a monetary
quantitative easing policy in the form of purchasing housing loan
claims. The BOJ's policy will likely be similar to that.

TOKYO 00003453 008 OF 010

The BOJ is mulling a plan to purchase asset backed securities, which
companies issue, secured on CP's and assets, from financial
institutions. Its aim is to directly help companies' cash
management.

The Development Bank of Japan (DBJ) will start purchasing CP's from
next week. Following the move, the BOJ will extend loans to the DBJ,
taking those CP's as collateral, thereby assisting cash management
by companies.

A plan to significantly boosting the purchases of long-term
government bonds held by banks from the current 1.2 trillion yen a
month has also surfaced. It can be expected that the bulk purchases
of long-term government bonds by the BOJ will weaken upward pressure
on long-term interest rate, thereby producing the effect of
encouraging companies to make investment, procuring long-term funds.


In the meantime, many BOJ officials are negative toward a rate cut
with one noting, "A further rate cut will undermine the functions of
the monetary market." However, long-term interest rates are already
declining on the market with a rate cut by the BOJ already factored
in. The BOJ will reach a decision on the 19th in a cautious manner.

12) DPJ throws Diet into turmoil as it rams job bills through Upper
House

MAINICHI (Top Play) (Excerpts)
December 19, 2008

The House of Representatives' Committee on Health, Welfare and Labor
passed job-creation bills jointly submitted by the Democratic Party
of Japan (DPJ), the Social Democratic Party and the People's New
Party yesterday. The Japanese Communist Party voted down the bills.
While ruling party members were making a protest to committee
chairman Tsukasa Iwamoto (of the DPJ), the DPJ rammed them through
the opposition-controlled Upper House. In reaction to the forced
passage of the bills, the ruling coalition submitted a resolution
calling for dismissing Standing Committee for House Management Takeo
Nishioka (DPJ) and Iwamoto.

After the Upper House passes the bills at its plenary session today,
they will be sent to the House of Representatives. The ruling
parties, however, intend to kill them, with time running out. The
standoff between the ruling and opposition camps is expected to
intensify.

The three opposition parties submitted the bills to the Upper House
on the 15th. Both camps agreed on holding deliberations yesterday,
but the ruling side was opposed to taking a vote the same day. But
Iwamoto decided on the date for voting on his authority as chairman
and steamrolled the bills through the Upper House, with
unprecedentedly holding a briefing and deliberations and then
putting them to the vote only in a day.

The bills contain these measures: (1) rules on job offer
withdrawals; (2) expanding the scope of employment adjustment
subsidies to cover temporary workers who worked for more than two
months; and (3) accommodation and welfare support for dismissed
temporary workers. Some of the measures in the bills are also listed
in the employment package the government plans to include in the

TOKYO 00003453 009 OF 010


fiscal 2008 second supplementary budget bill. The government has
decided to submit the budget bill to the next ordinary Diet session,
which starts in January.

13) Ruling coalition refuses Aso-Ozawa meeting on employment bills

YOMIURI (Page 4) (Excerpts)
December 19, 2008

Four employment measures bills, proposed jointly by the Democratic
Party of Japan (DPJ), the main opposition force, the Social
Democratic Party (SDP) and the People's New Party (PNP), were
approved yesterday by the House of Councillors Committee on Health,
Labor and Welfare. Immediately after the approval of the bills by
the Upper House panel, the DPJ asked the ruling Liberal Democratic
Party-New Komeito ruling camp for talks on the bills between Prime
Minister Taro Aso, president of the LDP, and DPJ President Ichiro
Ozawa. The DPJ's aim is to play up its stance of placing priority on
dealing with the employment problem, with job uncertainty growing
among the public. In order to avoid stepping into the ring with the
DPJ, the ruling bloc refused to accept the DPJ's request. In an
attempt to evade from falling into the DPJ's trap, the ruling
coalition is now desperately setting up a defense arm.

Committee members from the ruling parties surrounded Chairman
Tsukasa Iwamoto, a DPJ member, who declared the end of a
question-and-answer session, with one member saying: "We cannot
accept such a reckless act that the panel took a forced vote when we
only spent 150 minutes in deliberations. That's invalid."

The DPJ's scenario is to send the bills to the House of
Representatives after they are approved in an Upper House plenary
session today, and to urge the government and ruling parties to
enact the bills during the current Diet session. The DPJ therefore
hastened the vote on the bills yesterday. A senior DPJ member said:
"The ruling camp cannot approve the bills. However, they could have
difficulties deciding what approaches they should take in order to
show their positive stance for employment measures."

However, some opposition members are criticizing the DPJ's strategy.
The DPJ initially had planned to ask the ruling coalition for a
meeting with Aso after holding a meeting of the leaders of the DPJ,
SDP and PNP. However, the party-heads meeting plan was changed to a
meeting of the secretaries general, since the PNP said that the
party did not want to join a "useless performance."

14) Coordination underway in ruling camp on mid-term program

MAINICHI (Page 5) (Full)
December 19, 2008

The ruling Liberal Democratic Party (LDP) and its coalition partner
New Komeito discussed yesterday what approach they should take to
the government-drafted mid-term program for reform of the tax code,
which states as the government's policy the raising of the
consumption tax in fiscal 2011. Although the New Komeito is still
opposed to stipulating when to hike the consumption tax in the
program, the party seems to be showing signs of softening its
position, with one member of the ruling camp's project team saying:
"We have no intention to take up too much time." The New Komeito
intends to present its proposals to the second meeting today of the
project team.

TOKYO 00003453 010 OF 010

Former Finance Minister Fukushiro Nukaga, chair of the ruling
coalition's project team, met yesterday with New Komeito's Chikara
Sakaguchi, a project team member and former health, labor and
welfare minister. In the meeting, Sakaguchi seems to have conveyed
his party's policy of aiming at an early settlement to Nukaga.
Therefore, the LDP and New Komeito have now focused on the wording
in the government's mid-term program.

In this connection, New Komeito Secretary General Kazuo Kitagawa
indicated the possibility that the New Komeito would make
concessions. He stated in a press conference yesterday: "It would be
better to use expressions that show our efforts to recover the
economy. I don't think there is a big difference (in the views of
the government and New Komeito)." Appearing on BS11 digital program,
former LDP Secretary General Bunmei Ibuki pointed out: "Since the
New Komeito has remained in the ruling camp for a long time, it
understands well."

ZUMWALT

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