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Cablegate: Japanese Morning Press Highlights 12/22/08

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UNCLAS SECTION 01 OF 10 TOKYO 003470

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 12/22/08

Index:

Opinion:
1) Aso Cabinet support rate plummets 22.1 points to record low of
16.7 PERCENT in Jiji poll; DPJ head Ozawa now 10 points more
popular than prime minister (Tokyo Shimbun)
2) Prime Minister Aso's aides shocked by latest poll giving cabinet
only 16.7 PERCENT support rate (Mainichi)
3) LDP internal survey shows core supporters are abandoning the
party, with many willing to let the opposition DPJ have a turn at
running the country (Tokyo Shimbun)

Defense and security affairs:
4) Declassified document reveals Prime Minister Sato in 1965, just
after China tested nuclear weapon, asked Lyndon Johnson to nuke the
country if necessary (Asahi)
5) USFJ realignment outlays in the fiscal 2009 budget up 3.6 fold as
Guam relocation of Okinawa Marines gets started (Mainichi)
6) Vice Foreign Minister Hashimoto meets Prime Minister Maliki to
promise continuing assistance to Iraq (Tokyo Shimbun)
7) Okinawa passes ordinance on protection of environment that could
allow access to U.S. bases on pollution matters (Akahata)

Economic policy:
8) New Komeito likely to go along with clearly stating fiscal 2011
in the mid-term tax plan but not directly mentioning tax hike
(Nikkei)
9) State Minister for Economic and Fiscal Policy Yosano states that
consumption tax will be raised in stages to 10 PERCENT (Tokyo
Shimbun)
10) ODA budget cut constrained to 4 PERCENT in fiscal 2009 national
budget (Yomiuri)

11) Only one bill proposed by lawmakers was able to be passed in the
current extra Diet session (Tokyo Shimbun)

Democratic Party of Japan in action:
12) Senior DPJ officials will travel to the U.S. next month to build
ties to the new Obama administration (Mainichi)
13) U.S. Democratic Party seeks closer ties with Japan's DPJ
(Yomiuri)

Articles:

1) Cabinet support rate drops to 16.7 PERCENT in Jiji Press poll,
with DPJ head Ozawa now 10 points higher in popularity than Prime
Minister Aso

TOKYO SHIMBUN (Page 1) (Full)
December 20, 2008

According to a Jiji Press opinion poll carried out on Dec. 12-15,
the Aso Cabinet's support rate plummeted 22.1 points from last month
to 16.7 PERCENT , while the non-support rate soared 28.2 points to
64.7 PERCENT . Even on the question, "Which politician is more
appropriate as prime minister?", only 23.9 PERCENT of the
respondents chose Prime Minister Taro Aso, while 34.8 PERCENT
picked Democratic Party of Japan (DPJ) President Ichiro Ozawa.
With the cabinet support rate having fallen below the 20 PERCENT
line, it is inevitable that there will be an impact on the timing of
the Diet's dissolution for a snap election and on moves by members
of the Liberal Democratic Party (LDP) to distance themselves from

TOKYO 00003470 002 OF 010


Prime Minister Aso.

The survey was carried by face-to-face interviews among 2,000 male
and female adults. The effective rate of response was 66.3 PERCENT
.

As for support rates for political parties, the ruling DPJ dropped
5.2 points to 18.6 PERCENT , while the DPJ slipped 0.9 point to 13.4
PERCENT , indicating as before that it is not replacing the LDP as a
target for popular support. In addition, the coalition partner New
Komeito inched up by 0.1 points to 4.3 PERCENT , while the Japanese
Communist Party (JCP) rose 0.6 point to 2.0 PERCENT , and the Social
Democratic Party (SDP) rose 0.3 point to 1.1 PERCENT . Those who
supported no party increased 6.0 points to 58.2 PERCENT .

2) Prime Minister's aides shocked by Jiji Press opinion poll showing
cabinet support rate has dropped to 16.7 PERCENT

MAINICHI (Page 2) (Excerpts)
December 20, 2008

According to a Jiji Press opinion poll carried out Dec. 12-15 and
released on the 19th, the support rate of the cabinet of Prime
Minister Taro Aso fell 22.1 points from last month's level to 16.7
PERCENT . This is the first time for the support level to drop below
the 20-percent line in any poll. This has happened even though Prime
Minister Aso has worked hard to raise his cabinet's support rate,
even inspecting an employment agency on Dec. 19. An aide was
prompted to say, "The only thing to do now is bear it."

An aide to the Prime Minister was unable to conceal his surprise,
saying: "This is a shocking result, since the Prime Minister on Dec.
12 just delivered a press conference on his jobs package." In a
Mainichi poll carried out on Dec. 6-7, the cabinet support rate
dropped to 21 PERCENT , so his press conference on Dec. 12 was aimed
to stop that trend.

The Prime Minister's Official Resident (Kantei), which has become
increasingly alarmed, had Chief Cabinet Secretary Kawamura bring
into his press conference a panel that laid out briefing material on
the government's job measures. He explained for eight minutes
explaining the package. He criticized the bills related to job
creation presented to the Upper House by the Democratic Party of
Japan, saying, "There are a number of problems with them including
budgetary backing for the contents."

On the other hand, regarding the sagging support rate, Kawamura
would go no farther than to say: "As policy is steadily implemented,
we will seek the understanding of the nation."

3) LDP survey report shows core supporters are deserting the party,
regardless of location, gender, or generational lines; Strong calls
for the DPJ to be next ruling party

TOKYO SHIMBUN (Page 2) (Abridged)
December 20, 2009

The contents of a recent survey carried out by the Liberal
Democratic Party (LDP) report on voter consciousness were revealed
on Dec. 19. With the support rate of the Aso Cabinet plummeting, the
survey confirmed that the party's support base was crumbling and
concluded: "Support from the conservative strata, which form the

TOKYO 00003470 003 OF 010


core support base, is wavering. This is especially true among
women." As a result, the party is filled with sense of crisis. The
party executive, upon receiving the report, is hurriedly drafting
policy measures prior to the next Lower House election, and boiling
down a public-relations strategy.

Since late last year for almost a year, the LDP's project team to
grasp the public will (chaired by Lower House member Hirokazu
Matsuno) has carried out through hearings and other means a survey,
the results of which were compiled and presented on Dec. 18 to
Secretary General Hiroyuki Hosoda. The report confirmed: "There is a
view transcending locality, age, and gender of not putting the LDP
into power with the next election and letting the Democratic Party
of Japan (DPJ) have a try." The report underscored the reality that
not only are organized groups abandoning the party, but also that it
will not be possible to secure new support.

As for the reason, the report analyzed that the keywords of
stability, peace of mind, and accomplishment, were applicable also
to the DPJ under a two-party system, and that "voters had two
choices of switching from one party to the other that they could use
at any time." At the hearings, the severe view from supporters was
heard from one LDP backer (over 70 years old) that "(The party) has
reached the end of its life span."

The cause of the supporters leaving the LDP, it was pointed out, was
that by prioritizing elections based on organizational support, the
party could only grasp the will of special interests. The view was
that is was essential for the party to build a system of making
policy that reflected the will of those who were not part of any
organization, namely, those referred to as the unaffiliated voters.


In specific terms, it was proposed that the party actively use focus
groups of the kind used by the Clinton camp in the U.S. presidential
election in 1992.

4) Sato asked U.S. for nuclear retaliation in case of war with
China

ASAHI (Top play) (Abridged)
December 22, 2008

In January 1965, Prime Minister Eisaku Sato visited the United
States and met with Secretary of Defense McNamara. In the meeting,
their conversation referred to China's first nuclear test that was
conducted three months before Sato's visit to Washington at that
time. In that meeting, Sato expressed hope that the United States
will immediately carry out nuclear retaliation against China should
a war break out between Japan and China, indicating that Sato
tolerated a nuclear war. This became clear in a diplomatic document
disclosed by the Foreign Ministry under the date of Dec. 22.

The Sato-McNamara meeting took place on Jan. 13, 1965. Meanwhile,
China conducted a nuclear test in October of the preceding year.
Concerning this nuclear test, McNamara remarked that future
developments in the next couple of years will be noteworthy. In this
respect, McNamara asked Sato if Japan would try to develop nuclear
weapons or not. In response, Sato told McNamara that Japan was
opposed to the idea of possessing and using nuclear weapons, thereby
stressing that Japan would choose to remain under the 'U.S. nuclear
umbrella.'

TOKYO 00003470 004 OF 010

Sato also remarked: "When it comes to nuclear introduction (into
Japan), this is stipulated in the security treaty. In the case of
bringing (nuclear weapons) onto the ground (of Japan), I'd like to
ask you to be careful about what you are saying." He added: "If
there is a war (with China), that is not the case. I hope the United
States will immediately retaliate with nuclear weapons. On that
occasion, it would not be easy to build ground facilities for
nuclear weapons. But in the case of sea-based ones, I think it's
possible to invoke right away." McNamara said, "There's no technical
problem."

Remarks beyond principle

Hideki Kan, a professor of the history of diplomacy between Japan
and the U.S. at Seinan Jo Gakuin University, comments: "Prime
Minister Sato went beyond the principle of nuclear weapons intended
to avoid a war, and he went so far as to propose nuclear
retaliation. If such a remark had been brought to light, his cabinet
could have been toppled. Prime Minister Sato was well aware that the
United States was concerned about Japan's option of going nuclear,
and he implied the nuclear option in an aim to alert his U.S.
counterpart. China's nuclear possession was about to become a
reality. In that situation, his remark there, in a sense, was
probably a diplomatic card intended to ensure even more certain
security."

5) USFJ realignment: Related outlays in next fiscal-year budget to
expand 3.6 fold, with implementation of project to relocate
(Okinawa-based U.S. Marines) to Guam

MAINICHI (Page 7) (Full)
December 20, 2008

Outlays related to the realignment of U.S. forces in Japan in the
fiscal 2009 national budget were set on Dec. 19 at 68.92 billion yen
by coordination between the defense and finance ministries. Based on
the roadmap agreed on by the Japanese and U.S. governments in May
2005, a project to move U.S. Marines stationed in Okinawa to Guam
that includes building a facility on that island will be implemented
starting in fiscal 2009. In order to accomplish this, the related
expenditures will expand 3.6 fold from the current fiscal year, an
amount totaling 19.1billion yen.

The contents of the realignment-related outlays include: 1)
approximately 34.6 billion yen for such projects as readying the
building site on Guam for construction of a facility related to the
relocation of Okinawa-based Marines and construction of an access
road; 2) approximately 9.3 billion yen for constructing billets
connected to the relocation of MCAS Futenma to a site on the coastal
portion of Camp Schwab (Nago City); and 3) approximately 9.1 billion
yen for realignment subsidies to be paid to local governments that
cooperate in the USFJ realignment.

The move to Guam is scheduled for completion by 2014, as set by the
road map. Fiscal 2009 will be the first fiscal year for
implementation of the project. Japan's share of the burden, which is
estimated at $2.8 billion (250 billion yen) is likely to be subject
to intense study now, given the country's severe fiscal straits.

On the other hand, in connection with the Futenma relocation, talks
between local governments, including Okinawa Prefecture, which is

TOKYO 00003470 005 OF 010


seeking to move the relocation site into the ocean, and the central
government have bogged down, and the budget allocation for the
actual project has been put off.

6) Vice foreign minister in meeting with Iraqi prime minister
conveys Japan's willingness to continue aid for Iraq

TOKYO SHIMBUN (Page 2) (Full)
December 22, 2008

(Baghdad, Kyodo News)

Vice Foreign Minister Seiko Hashimoto visited Baghdad, the capital
of Iraq, on Dec. 21 with no prior announcement and met with Prime
Minister Nouri al-Maliki. Hashimoto conveyed to him the Japanese
government's willingness to continue cooperation in reconstructing
Iraq although Air Self-Defense Force troops ended their humanitarian
reconstruction mission there. The prime minister replied: "I am
thankful for Japan's great contributions through the dispatch of the
Self-Defense Force."

Hashimoto also met Vice President Adel Abdel Mahdi and said that
Japan is ready to dispatch a mission to monitor the local elections
in Iraq scheduled for Jan. 31.

This is the first visit to Iraq by a Japanese high-ranking official
since then Economy, Trade and Industry Minister Akira Amari visited
the country this June.

In meeting with the vice president, Hashimoto said: "Japan will work
toward a further strengthened long-term, strategic partnership with
Iraq and will cooperate in reconstructing the nation and forming
untroubled and safe living conditions also in the future." She thus
emphasized that Japan is willing to strengthen relations with Iraq
with such development aid as yen loans and the transfer of
technology.

According to Hashimoto, al Maliki expressed his strong hope for
Japanese companies' participation in an oilfield development project
in Iraq. Hashimoto replied: "The government and the private sector
will do their best to respond to his expectation."

Hashimoto also asked the Iraqi government's support for Japan's bid
to bring the 2016 Olympic Games to Tokyo. The prime minister
reportedly indicated a positive view in response to her request.

7) Spot environmental inspections eyed for U.S. bases in Okinawa

AKAHATA (Page 1) (Full)
December 20, 2008

The Okinawa prefectural assembly held a plenary meeting yesterday to
wind up its November regular session and unanimously adopted a draft
ordinance for environmental conservation with an amendment. The
assembly also passed a supplementary resolution.

The Japanese Communist Party presented the amendment, using its
right to submit bills to the assembly. The amendment, in its third
article, specified three specific points for Okinawa Prefecture to
implement. One is that Okinawa Prefecture may propose concluding an
agreement with those in charge of managing U.S. military bases in
order to reduce aircraft noise and other environmental issues

TOKYO 00003470 006 OF 010


resulting from U.S. military bases.

The second point is to expedite reusing the sites of U.S. military
bases after they are returned. To do so, the Okinawa prefectural
government may propose incorporating a clause in that agreement to
disclose information about the history of land uses and the
condition of soil contamination.

Thirdly, Okinawa may propose conducting on-the-spot inspections of
U.S. military bases in cases of air, water, and soil contamination
and to clear up its causes in case it is believed to be ascribable
to U.S. military bases.

In addition, the supplementary resolution cites five points. One of
the points cited in the resolution is to call on U.S. forces to
respond at once if and when Okinawa's prefectural or municipal
governments propose an on-the-spot inspection of U.S. military
bases. The resolution also calls for applying domestic laws to
activities at U.S. military bases in order to protect the
environment of local communities. The resolution strongly calls for
the Japanese and U.S. governments to take necessary steps to
facilitate the five points.

8) New Komeito approves specifying "fiscal 2011" in mid-term
program, on condition of not linking it to consumption tax hike

NIKKEI (Page 2) (Full)
December 20, 2008

The government and the ruling parties continued coordination
yesterday over a mid-term program on drastic tax reform, including a
consumption tax hike. The ruling camp's project team, headed by
Fukushiro Nukaga, shared the view in its meeting that the government
should present a clear-cut roadmap for economic recovery on the
premise of increasing taxes. The New Komeito approved the
government's plan to specify fiscal 2011 for economic recovery on
the condition of not linking it to the timing for raising the
consumption tax.

A senior New Komeito member told reporters after the meeting: "It
would be possible to write, 'we will aim at picking up the economy
within three years'."

This remark is intended to oppose the use of an expression that
could be interpreted as a consumption tax hike while approving
revealing the policy of aiming at economic recovery by fiscal 2011.

The government's Council on Economic and Fiscal Policy has proposed
inserting these words in the mid-term program that drastic tax
reform should be started in fiscal 2011 after the economy turns
around and be implemented in stages by fiscal 2015. The New Komeito
has opposed specifying the time for a consumption tax hike. The
government intends to continue efforts to iron out differences with
the ruling camp, with an eye on a cabinet decision on the 24th.

9) Sales tax to be raised in stages to 10 PERCENT , state minister
for economic and fiscal policy reveals

TOKYO SHIMBUN (Page 1) (Full)
December 22, 2008

Referring to the extent of a proposed hike in the sale tax to

TOKYO 00003470 007 OF 010


finance social security spending, State Minister for Economic and
Fiscal Policy Hajime Yosano stated that in his view it would be
necessary to raise in stages the tax to 10 PERCENT by fiscal 2015.
He noted, "The government will hike the consumption tax by 5 PERCENT
(by fiscal 2015)."

The government is now undergoing coordination with the ruling
parties for the compilation of a mid-term program for social
spending and the tax code. The program will mention the government's
policy of hiking the consumption tax in fiscal 2011. However, the
extent of the hike will not likely be included. Yosano's mentioning
the planned extent the hike at this stage will likely have an impact
on current discussions on the program.

Yosano said, "There are such proposals as to gradually raise the
rate by 1 PERCENT a year or to raise it 2 PERCENT (in fiscal 2011)
and then 3 PERCENT after that."

Yosano then pointed out that even if the rate of the consumption tax
is hiked to 10 PERCENT by fiscal 2015, it would be difficult to
finance social security spending. Noting the possibility of a
further expansion of social security spending, he said that the
government would have to consider what to do about social security
in relation to the tax possibly by fiscal 2025.

10) ODA cut constrained to 4 PERCENT in fiscal 2009 budget due to
additional funds allocated from promotional framework

YOMIURI (Page 2) (Full)
December 22, 2008

The Finance Ministry on December 21 decided to allocate
approximately 9.5 billion yen to the official development assistance
(ODA) budget from a 333 billion yen framework in the fiscal 2009
budget set by Prime Minister Aso to promote important programs. The
aim is to tap the fund to strengthen the nation's diplomatic
capabilities as advocated by the prime minister. The Finance
Ministry in its draft budget for the fiscal 2009 budget trimmed the
ODA budget to 662.7 billion yen, down 5.4 PERCENT from the fiscal
2008 initial budget. If 9.5 billion yen is allocated to the ODA
budget from the promotional funds, the extent of the cut would be
constrained to about 4 PERCENT .

The government incorporated in its basic policy guidelines on
economic and fiscal management and structural reforms for the fiscal
2006 national budget a policy of slashing the ODA budget by 2
PERCENT -4 PERCENT a year until fiscal 2011. The government has
thus far cut the budget annually by 4 PERCENT . It had been expected
to do so in the fiscal 2009 budget, as well.

Liberal Democratic Party Policy Research Council Chairman Hori and
his New Komeito counterpart Yamaguchi on the 21st put together their
party members' requests for the recovery of ODA budget allocations
in the fiscal 2009 budget and asked Finance Minister and State
Minister for Financial Policy Nakagawa to comply with their request.
Prime Minister Aso and Nakagawa will met on the 22nd and finalize
the use of funds from the promotional framework and restore fiscal
resources worth 20 billion yen, whose use has yet to be decided. The
government intends to adopt its draft budget at a cabinet meeting on
the 24th.

11) Only one lawmaker-initiated bill enacted in current Diet

TOKYO 00003470 008 OF 010


session

TOKYO SHIMBUN (Page 2) (Slightly abridged)
December 22, 2008

Only one bill sponsored by lawmakers has so far cleared the ongoing
extraordinary Diet session, which is to end on Dec. 25. Even in the
extraordinary session held last fall after the opposition camp won a
majority in the House of Councillors in the election in July, 12
bills were passed into law. The current situation is quite unusual.

Only a bill amending the National Health Insurance Law to rescue
uninsured children has been enacted in the current session. There
are no prospects for other lawmaker-initiated bills now on the
agenda to be passed in the Diet.

Under the politically divided Diet situation, 12 bills and 17 bills
were enacted in the extraordinary Diet session last year and in the
ordinary Diet session this year, respectively. In the ordinary Diet
sessions and extraordinary Diet session that lasted more than one
month in the past decade, seven to 23 bills proposed by lawmakers
were enacted. Passing just one is unusual.

An increasing number of bills have been submitted by ruling party
members recently, as a symbol of policymaking responsibility shifted
from bureaucrats to politicians. There were days when policymaking
by a cross-party of lawmakers was valued, for instance, in dealing
with North Korea.

Now that the opposition camp controls the House of Councillors,
however, bills presented by opposition parties as counterproposals
to government bills are gaining influence and have been used for
political purposes.

Cited as a typical case is the enactment in an Upper House plenary
session on Dec. 19 of four employment bills submitted by the
Democratic Party of Japan (DPJ), the Social Democratic Party, and
the People's New Party. The Liberal Democratic Party has fiercely
reacted to the DPJ's move, with one senior Upper House member
saying: "The DPJ is using legislation that it has no intention to
enact as a tool for political purposes."

It should be rational for employment measures to be presented after
the ruling and opposition camps held consultations, but an LDP Diet
Affairs Committee member said resignedly: "With the run-up to the
dissolution of the House of Representatives, it is impossible to see
efforts to promote talks gain momentum."

12) Senior DPJ officials to visit U.S. possibly next month to build
network of personal connections with Obama administration

MAINICHI (Page 2) (Full)
December 21, 2008

The Democratic Party of Japan (DPJ) on December 20 decided to
dispatch party executives to the United States, possibly in January
2009 right after the inauguration of Barack Obama as president. The
delegation will be led by Secretary General Yukio Hatoyama. The
party will coordinate for a possible meeting with Vice
President-elect Biden. The aim is to take the initiative from the
Liberal Democratic Party (LDP), which has been attaching excessive
importance to relations with the Bush administration. The DPJ wishes

TOKYO 00003470 009 OF 010


to build a network of personal connections with the Democratic
administration, taking advantage of the change in government in that
nation.

U.S. Democratic Party members who once served in key national
defense-related posts met with senior DPJ officials in Tokyo on the
19th and called on them to make a U.S. visit. The American side
reportedly said that since most of U.S. politicians believe that
Japan favors the Republican Party, it is advisable for the DPJ to
quickly dispatch its members to the U.S. and build ties with the
Obama administration.

Delivering a speech in Yokkaichi City, Mie Prefecture on December
20, Vice President Katsuya Okada, who was at the meeting, took a
positive stance, saying, "I would like to build relations with
President-elect Obama's administration shortly, based on the U.S.
side's wishes." Referring to President Clinton's meeting with the
heads of the opposition parties when he visited Japan right before
the launching of the non-LDP Hosokawa administration in 1993, Okada
said, "President Clinton encouraged the opposition parties." He then
indicated his view, "Since there is a possibility of the DPJ taking
power from the governing LDP this time, they may want to build
relations with us."

13) U.S. Democratic Party approaches DPJ

YOMIUIRI (Page 4) (Full)
December 20, 2008

Democratic Party of Japan (Minshuto) Deputy President Kan, DPJ
Secretary General Hatoyama, and other party executives met yesterday
at a Tokyo hotel with former U.S. Assistant Secretary of Defense
Joseph Nye and Center for Strategic and International Studies (CSIS)
President John Hamre, who are affiliated with the U.S. Democratic
Party. The U.S. counterparts expressed concern over the DPJ's
advocacy of suspending the Maritime Self-Defense Force's refueling
activities in the Indian Ocean, and they asked the DPJ executives to
visit the United States in order to build a relationship with the
new U.S. administration under President-elect Obama.

Nye and others are visiting Japan for a symposium. The meeting was
held at the U.S. side's request. Two DPJ vice presidents, Katsuya
Okada and Seiji Maehara, and DPJ International Affairs Bureau
Director General Tetsundo Iwakuni attended the meeting. On the U.S.
side were CSIS Japan Chair Michael Green, a well-known Japan hand,
and former Assistant Secretary of State James Kelly, who was chief
delegate to the six-party talks.

One of those who attended the meeting quoted Nye as saying: "The
DPJ's manifesto says the DPJ is opposed to relocating the U.S.
Marine Corps' Futenma Air Station and is calling for suspending the
MSDF's refueling activities in the Indian Ocean. If you suddenly
make these proposals to the Obama administration, they would not
think you want to maintain our bilateral alliance."

Hamre suggested the need for the DPJ to hold discussions with the
U.S. side in preparation for the case where the party takes office.
With this, he called on the DPJ to have its executives and foreign
policy planning officers visit the United States at the earliest
possible time after the Obama administration is inaugurated.

"They implied it's important to deepen our communication with each

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other," Hatoyama told reporters yesterday.

ZUMWALT

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