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Cablegate: Daily Summary of Japanese Press 07/12/06

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ZNR UUUUU ZZH
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FM AMEMBASSY TOKYO
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RHEHAAA/THE WHITE HOUSE WASHINGTON DC PRIORITY
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RHMFIUU/HQ PACAF HICKAM AFB HI//CC/PA//
RHMFIUU/COMUSJAPAN YOKOTA AB JA//J5/JO21//
RUYNAAC/COMNAVFORJAPAN YOKOSUKA JA
RUAYJAA/COMPATWING ONE KAMI SEYA JA
RUEHNH/AMCONSUL NAHA 9772
RUEHFK/AMCONSUL FUKUOKA 7176
RUEHOK/AMCONSUL OSAKA KOBE 0476
RUEHNAG/AMCONSUL NAGOYA 7050
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RUEHBJ/AMEMBASSY BEIJING 3252
RUEHUL/AMEMBASSY SEOUL 9399
RUCNDT/USMISSION USUN NEW YORK 1140

UNCLAS SECTION 01 OF 08 TOKYO 003909

SIPDIS

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: DAILY SUMMARY OF JAPANESE PRESS 07/12/06

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INDEX:
(1) Editorial: Enemy strike argument requires calm and thorough
discussion

(2) Gov't begins studying strike on enemy country; Ruling parties
out of step

(3) North Korea's missile launches boosts Abe's political identity;
Is Koizumi urging Abe to heighten his awareness?

(4) Interview with Internal Affairs and Communications Minister
Takenaka on Koizumi reforms over five years: Prime minister
demonstrates leadership in policymaking, but concerned about change
in nature of policy panel

(5) Elimination of factional influence: Abe secretly asked Yuji
Yamamoto, chairman of Parliamentary League to Support Second Chance,
in March to support challenge for LDP presidential race

ARTICLES:
(1) Editorial: Enemy strike argument requires calm and thorough
discussion

MAINICHI (Page 5) (Full)
July 12, 2006

"In order to defend the people within the context of the
Constitution, there is every reason for Japan to have a limited
capability to (strike an enemy country) as an independent country."

These words came from Defense Agency Director-General Fukushiro
Nukaga in a press conference following the launch of ballistic
missiles by North Korea.

Chief Cabinet Secretary Shinzo Abe also said, "We need to study that
option at all times." Liberal Democratic Party Secretary General
Tsutomu Takebe also echoed Nukaga's view.

SIPDIS

In contrast, Prime Minister Junichiro Koizumi called for caution,
while acknowledging the need for discussion. The New Komeito is
dismissive of the argument, saying, "Striking an enemy base will
turn into an all-out war."

The Hatoyama cabinet presented the enemy strike argument for the
first time in 1956 as the government's view. Logic behind the
argument is that striking an enemy base in response to an attack on
Japan with a guided missile or other weapon constitutes an act of
self-defense as long as there is no other means for defense. It is a
classic yet new argument.

Japan basically takes an exclusively defense-oriented policy, which
means to: (1) take defensive action only after being attacked by
another country; and (2) maintain a defense capability at a minimum
level.

For this reason, Japan has refrained from possessing
intercontinental ballistic missiles, long-range strategic bombers,
and attack aircraft carriers. Japan's defense strategy in time of a
national emergency is to let the Self-Defense Forces take defensive
action and leave the offensive action to the US military.

Japan has provided US Forces Japan with bases in accordance with the
bilateral security treaty. Role sharing between Japan and the United

TOKYO 00003909 002 OF 008


States is specified in the Guidelines for Japan-U.S. Defense
Cooperation. Japan has also improved the law to extend logistical
support to US forces in action in areas surrounding Japan.

In order for Japan to introduce offensive weapons based on the enemy
strike argument, the nation's strictly defense-oriented policy must
be turned around. It would also be necessary to review the
realignment of US forces in Japan, to which the defense chief also
agreed. The nature of the Japan-US alliance would also change. An
independent defense argument may arise in the end.

If that is the case, Japan in strengthening its defense capability,
would have to give up its status as a "peaceful nation." Other Asian
countries may regard Japan as a threat. Japan's peace diplomacy
based on the bitter WWII lesson may also fall apart.

North Korea has reportedly deployed 200 Rodong missiles, which have
Japan in their range. That country has also declared it possesses
nuclear weapons. The abduction issue, too, remains unsettled.
Needless to say, North Korea remains a major threat to Japan.

North Korea launched ballistic missiles in defiance of repeated
warnings. The Japanese people are frustrated and irritated with a
lack of effective means to cope with the intimidating missile
launches. Some may have questions about the rigid defense-oriented
argument. There is need to discuss how to deal with the new
intimidating situation.

Nukaga's statement sounds farfetched, however. His comment includes
crucial aspects, such as how to sort out the relationship with the
US-Japan Security Treaty. A conclusion must not be reached so
easily.

Rational and thorough discussion is necessary in view of the new
situation and the country's defense capability.

(2) Gov't begins studying strike on enemy country; Ruling parties
out of step

SANKEI (Page 3) (Full)
July 11, 2006

In the wake of North Korea's recent firing of missiles, the
government has entered into a full-fledged study of striking an
enemy country to pound its missile sites before they fire missiles.
The study is based on the government's unified view adopted in the
days of Prime Minister Ichiro Hatoyama's cabinet. The government's
position in the unified view is that it is not the spirit of the
Constitution of Japan to wait for self-destruction while doing
nothing if and when there is a country that is obviously intent to
aggress against Japan. Defense Agency Director General Fukushiro
Nukaga has declared that the government would discuss the matter. In
point of fact, however, it is impossible for the Self-Defense Forces
to strike an enemy country as long as the SDF's equipment remains at
the present level. In the meantime, the ruling parties are getting
out of step over the advisability of striking enemy bases.

"It's all right to study this matter while theoretically
anticipating various cases," Prime Minister Junichiro Koizumi told
reporters on the evening of July 10 when he was asked about Nukaga's
remarks that touched on the possibility of striking an enemy
country. At the same time, however, Koizumi also suggested the need
for the government to remain cautious in its study of the option,

TOKYO 00003909 003 OF 008


saying: "It's quite difficult to find out whether they will attack
Japan. It's different from a preemptive strike."

In 1956, when the Hatoyama cabinet was in office, the government
deemed it possible to strike an enemy country.

After that, however, the government tabooed the notion of striking
an enemy land. And even now, 50 years later, the government still
has no clear-cut guidelines to deem it possible to strike an enemy
land.

In January 2003, Defense Agency Director General Shigeru Ishiba
stated before the Diet that Japan might be allowed to strike an
enemy country if and when that country has "a clear intention to
aggress against Japan" and in case that country has "set a missile
on a launch pad or is preparing to fuel a missile." However, Japan
cannot strike any missile site in North Korea as long as North Korea
prepares to test-fire a missile with a hidden intention to attack
Japan.

Then, is the SDF capable of striking North Korea's bases?

"It's possible under legal theory," Defense Agency Administrative
Deputy Director General Takemasa Moriya said in a press conference
on July 10. "But," Moriya went on, "Japan expects the United States
to strike enemy bases." In 1997, Japan and the United States revised
their guidelines for bilateral defense cooperation. The new version
of the defense guidelines stipulates that "US forces will consider,
as necessary, the use of forces providing additional strike power"
in case Japan comes under a missile attack.

In the press conference, Moriya cited some reasons for that: 1)
Japan does not have any missiles that can reach North Korea; 2)
Japan does not have any attack aircraft that can fly to and back
from an enemy base; and 3) Japan does not have any aircraft that can
dodge enemy radar.

However, there are arguments even within the Defense Agency over
whether the SDF is really incapable of striking an enemy land.

In April last year, Defense Agency Director General Yoshinori Ono
revealed that the Defense Agency in 1994 simulated Air Self-Defense
Force fighter jets' strike on a missile base in North Korea.
According to Ono, the ASDF answered that its fighters would be able
to strike a North Korean missile site if they try.

In that simulation, however, the Defense Agency anticipated that
ASDF attack fighters would have to land at a US military base in
South Korea if they run out of fuel and that their pilots may have
to be ejected over the Sea of Japan. "It wouldn't be a realistic
mission," one senior official of the Defense Agency said.

Meanwhile, the Defense Agency has now decided to introduce tanker
aircraft needed for fighter jets to make longer flights. Last year,
the agency planned technology research for long-range guided
missiles that can strike an enemy land. However, the New Komeito
party, a coalition partner of the ruling Liberal Democratic Party,
raised an objection to this planned technology research. Eventually,
it was not incorporated in the agency's midterm defense buildup
program. The agency still cannot expect to go ahead with its
feasibility study of long-range guided missile technology.

Opposition parties are cautious about Nukaga's remarks. In addition,

TOKYO 00003909 004 OF 008


there are also cautious arguments from within the ruling coalition.

LDP Secretary General Tsutomu Takebe gave high marks to Nukaga's
remarks. "We know they will fire missiles," Takebe said. He added:
"Even so, do we do nothing? That's unacceptable. We should make
positive efforts if we need to legislate measures."

However, New Komeito President Takenori Kanzaki voiced a negative
view on July 10. "Theoretically, there are various ideas," Kanzaki
said. "But," he also said, "that would mean a full-scale war (in the
case of striking a North Korean missile base)." He added, "So the
government should remain cautious in its study." Another New Komeito
executive said, "Japan may have to acquire that capability in time,
but it's dangerous to go for it." This executive also said, "So we
will apply the brakes."

(3) North Korea's missile launches boosts Abe's political identity;
Is Koizumi urging Abe to heighten his awareness?

TOKYO SHIMBUN (Page 2) (Full)
July 12, 2006

Chief Cabinet Secretary Shinzo Abe, who is regarded as the most
likely candidate to succeed Prime Minister Junichiro Koizumi, has
rapidly boosted his political identity in the government by his
diplomatic handling of the fallout from North Korea's ballistic
missile launches. He is now serving as acting prime minister since
Koizumi left yesterday for a seven-day trip to the Middle East and
Russia. With the Liberal Democratic Party (LDP) presidential
election coming up in September, the Prime Minister's office has
already taken an aspect of being under Abe's control.

The government has unusually taken a tough stance toward the North's
missile launches. Many point out the presence of Abe, known for his
hard-line stance toward North Korea, as the reason for Tokyo's
strong stand toward Pyongyang.

Japan has submitted to the UN Security Council a resolution calling
for sanctions on North Korea. Abe said that China's proposal for
issuing a nonbinding chairman's statement "is meaningless." He has
continued seeking an adoption of the resolution.

Abe has been engaged with negotiations with US National Security
Advisor Stephen Hadley and US Ambassador to Japan Thomas Schieffer
since June. He promised to support the US resolution even though
Washington was concerned about whether Japan would go along with it.
Abe's thorough preparations have brought about Japan's tough stance,
supported by close cooperation with the United States.

Abe also played an important role in imposing Japan's independent
sanctions against Pyongyang, including a ban on North Korean
freighter Man Gyong Bong 92's entry into Japanese ports.

In a meeting on July 4 a day before the North test-fired missiles, a
government official proposed prohibiting the North Korean freighter
from entering Japanese ports only when a missile flied over Japan,
but Abe turned down the proposal, saying, "North Korea has already
had an yellow card due to its abductions of Japanese nationals." The
meeting held at the Prime Minister's office decided to ban Man Gyong
Bong 92 from entering Japanese ports even when a missile dropped
into the Sea of Japan.

There are no signs that Prime Minister Koizumi has given Abe any

TOKYO 00003909 005 OF 008


specific instructions, even though Abe reports to him. Koizumi
appears to have entrusted the handling of the issue to Abe.

It seems that Koizumi is trying to impress audiences at home and
abroad that Abe would be able to head the Prime Minister's office by
letting Abe handle the missile issue and serve as his proxy during
his overseas trip. Koizumi is believed to think of Abe as his
successor. He is probably urging Abe to boost his consciousness.

Abe underscored that he was prepared for the role, saying, "As
acting prime minister, I will handle matters responsibly."

(4) Interview with Internal Affairs and Communications Minister
Takenaka on Koizumi reforms over five years: Prime minister
demonstrates leadership in policymaking, but concerned about change
in nature of policy panel

NIHON KEIZAI (Page 4) (Full)
July 11, 2006

-- Has the situation in recent discussions at the Council on
Economic and Fiscal Policy changed?

"I think the Finance Ministry's intentions have been strongly
reflected in recent debates, and I have complained about it. Under
such a situation, the panel would find it difficult to play the role
of an engine.

In pursuing the task of reforming both expenditures and revenues,
the Liberal Democratic Party (LDP) has demonstrated leadership as a
powerful engine under the prime minister and centered on the Policy
Research Council chairman. The prime minister has exerted
leadership, but he takes a different style on each occasion."

-- Some say they are satisfied at the party serving as an engine to
promote the reform drive.

-- I think that is a high-level political judgment. In carrying out
reforms at the initiative of politicians, it would be ideal for the
party to take the lead. In order to make the panel serve as an
engine, the prime minister's strong leadership and cohesiveness in
managing it are essential. It might be correct to think that this
was possible under the leadership of Prime Minister Koizumi. It has
been proved that the policy council can be used as a tool, if
desired. The next leader supposedly will be required to skillfully
make use of the party, the government, and the council for different
tasks."

-- Some critics denounce the top-down management in the council as
dictatorial.

"As a result of Prime Minister Koizumi's reform efforts, reactionary
forces have gained considerable influence. Roughly classified, there
are three types of forces. First, the reinvigoration of the
bureaucracy can be listed. Over the past five years, dissatisfaction
built up in the heart of bureaucrats. There are many things that
Prime Minister Koizumi and the Council on Economic and Fiscal Policy
have done over the opposition of government officials, such as
postal privatization, the disposal of nonperforming loans, economic
and fiscal management, and regulatory reform.

Secondly, there are moves against globalization and market-oriented
economic reform efforts. The Japanese economy has finally recovered

TOKYO 00003909 006 OF 008


enough to compete on an international scale over the past five
years. If the reform drive is slowed down now, Japan will become
less competitive in the world market. The government must deal
severely with such illegal activities as the Livedoor and Murakami
Fund scandals. That is why I feel regret when I hear some saying
that regulatory reform is wrong.

Resistance to a change of generation can be cited as the third
force. In China, those who were born in the 1960s and graduated from
college in the 1980s, securing key posts, have taken the lead in
promoting reforms. Such a trend has yet to occur in Japan."

-- Somewhat fed up with the ongoing reforms, the public now harbor a
grievance and a sense of anxiety, don't they?

"It is true that many people cannot control their uneasiness and
hide their pent-up feelings. To my regret, although the economy has
emerged from its worst state, the effect of the improvement has yet
to reach all the population. The government is now being put to the
test as to whether it will uphold the reform initiative on both
political and economic fronts.

-- The challenge of reforming spending and revenues will be left to
the next administration as its homework.

"The key point is whether priority is given to economic policy or
fiscal policy. If priority is given to fiscal policy, when the
economic situation becomes serious, the government will increase
public works projects. When faced a fiscal deficit, it will hike
taxes. But I have insisted in the Koizumi cabinet that priority
should be given to economic policy. I take the view that the
government, when faced with an economic recession, should promote
the disposal of nonperforming loans and regulatory reform as
measures to buoy up the economy, without relying on public works.

Unless tax hikes are minimized, the people will not be convinced,
and the economy will not improve, either. Four years ago, when the
nation's financial deficit reached its peak, the primary balance
shortfall totaled 28 trillion yen. This figure has dropped to below
14 trillion now. This result is owing to the economic policy
measures the government has so far taken, even without raising the
consumption tax rate. In its debates since early this year, the
policy panel has apparently had a bias toward increasing taxes.

(5) Elimination of factional influence: Abe secretly asked Yuji
Yamamoto, chairman of Parliamentary League to Support Second Chance,
in March to support challenge for LDP presidential race

MAINICHI (Page 5) (Full)
July 11, 2006

Yuji Yamamoto, director general of the Accounting Bureau of the
Liberal Democratic Party (LDP), and Chief Cabinet Secretary Shinzo
Abe were sitting face to face at a Japanese restaurant near the Diet
building in mid-March. At the time, Abe still did not clarify his
intention to run in the LDP presidential race. Soon after the meal
and drinks were served, Abe calmly spoke to Yamamoto: "I plan to run
in the presidential election. Would you mind pulling together some
young party members?

Yamamoto, surprised at Abe's straightforward remark, automatically
questioned: "Are you really going to run? You won't give up in the
middle, will you?"

TOKYO 00003909 007 OF 008

"I am resolved to run in the race," Abe replied as if a further
confirmation was needed. This was the primary reason for the setting
up of a "Parliamentary League to Support a Second Chance," comprised
of junior and mid-level lawmakers who support Abe.

Yamamoto, now serving in his sixth-term in the Diet, belongs to the
faction led by former Foreign Minister Masahiko Komura. In the 2003
LDP presidential election, he backed Komura. The faction has only 16
members, but Komura secured 54 votes in the end. It was difficult
then for Yamamoto to get endorsement of 20 lawmakers, the number
needed to run in the LDP presidential race. Yamamoto went through
much trouble.

Yamamoto later began to think that it would be good for the party
and its lawmakers to select a president based on personal decisions,
eliminating factional influence, Abe then approached him. A lawmaker
close to Abe said, "Mr. Abe had his eyes on Yamamoto's efforts in
the previous presidential election, and for that reason, he seems to
have recruited him."

The government's Council for Promotion of Second Chance is a perfect
tool to organize support by keeping a distance from the presidential
race. Yamamoto sought Komura's approval, saying, "Mr. Abe is from
Yamaguchi Prefecture where you come from." He then started moving
into action in early May. Yoshihide Suga, senior vice minister of
internal affairs and communications, acted as liaison between Abe
and Yamamoto. They were able to collect the endorsement of 20
lawmakers (two later withdrew) in just one week.

Those who played the leading role were Yamamoto, Suga, a Koga-Niwa
faction member, who is now serving in his fourth term in the Diet,
Hiroshi Kajiyama, a third-termer with no factional allegiance, and
Isshu Sugawara, who belongs to no faction and is serving in his
second term in the Diet. The selection of members impressed other
because there was no factional influence, and the members
represented generational change. A total of 94 junior and mid-level
lawmakers (including lawmakers with no factional allegiance) from
seven factions attended the first meeting of the parliamentary
league on June 2 when Yamamoto assumed its chairmanship. The number
of participants indicated how high the expectations of junior to
mid-level lawmakers are of Abe.

However, existing factions and veteran lawmakers reacted strongly to
that new development. The second meeting, planned for mid-June, was
delayed to sometime after the end of the regular Diet session.

On June 16, Yamamoto called on former Prime Minister Yoshiro Mori at
his office since Mori had expressed displeasure with the
parliamentary league, concerned that the group's moves might provoke
a standoff with his favorite Yasuo Fukuda.

Yamamoto said to Mori, "If Mr. Fukuda decides not to run, I would
like you to support Mr. Abe." Mori responded, however, "We don't
know whether Mr. Fukuda will run or not." Many in the party already
saw the parliamentary league as working toward the formation of a
government led by Abe.

Abe stated that he would announce his candidacy in mid-August or
later. Yamamoto and other members plan to set out on a stumping tour
of regional areas late this month. They plan to hold meetings with
local government official as an opening move to secure rank-and-file
member votes.

TOKYO 00003909 008 OF 008

When and where the league will hold its second meeting is crucial
for Abe in his drive to assume the prime minister's post.

SCHIEFFER

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