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Cablegate: Japanese Morning Press Highlights 07/02/07-1

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ZNR UUUUU ZZH
P 020133Z JUL 07
FM AMEMBASSY TOKYO
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RUEAWJA/USDOJ WASHDC PRIORITY
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RHHMUNA/HQ USPACOM HONOLULU HI
RHHMHBA/COMPACFLT PEARL HARBOR HI
RHMFIUU/HQ PACAF HICKAM AFB HI//CC/PA//
RUALSFJ/COMUSJAPAN YOKOTA AB JA//J5/JO21//
RUYNAAC/COMNAVFORJAPAN YOKOSUKA JA
RUAYJAA/CTF 72
RUEHNH/AMCONSUL NAHA 4253
RUEHFK/AMCONSUL FUKUOKA 1838
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RUEHNAG/AMCONSUL NAGOYA 0946
RUEHKSO/AMCONSUL SAPPORO 2647
RUEHBJ/AMEMBASSY BEIJING 7684
RUEHUL/AMEMBASSY SEOUL 3742
RUCNDT/USMISSION USUN NEW YORK 4836

UNCLAS SECTION 01 OF 07 TOKYO 002982

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: JAPANESE MORNING PRESS HIGHLIGHTS 07/02/07-1


Index:

12) Kyuma retracts atomic-bomb statement and apologizes
13) Kyuma on Sunday TV show: US dropping of atomic bombs on Japan
was unnecessary
14) Kyuma, having apologized, must explain what he meant by his
atomic remarks to the ruling parties
15) In debate, Abe says Kyuma was misunderstood, but Minshuto head
Ozawa rebuts, saying the US should apologize to Japan for dropping
atomic bombs

16) Abe, Ozawa debate starts the election campaign for the Upper
House race

17) Citing need to maintain a "robust Japan-US alliance," Abe's
advisory panel on collective self-defense would allow Japan to
intercept missiles bound for US

18) Foreign Minister Aso tells Iran's vice foreign minister that
Iran needs to have transparency in its nuclear program

19) Concerned LDP lawmakers in letter, as US Congress to hold off
vote on House resolution on comfort women

20) Declassified document shows US President knew of 1969 secret
pact on Okinawa

21) JETRO to be privatized as part of speedy reform of independent
administrative agencies

Articles:

12) Kyuma apologizes and retracts his comments

TOKYO SHIMBUN (Page 1) (Full)
July 2, 2007

At noon yesterday, Defense Minister Fumio Kyuma at a press briefing
in Shimabara City, Nagasaki Prefecture, talked about his comments in
a speech on the previous day that the dropping of atomic-bombs (on
Hiroshima and Nagasaki by the United States during WWII) "couldn't
be helped" and apologized by noting: "My position of not condoning
the use of atomic bombs has not changed, but given news reports on
my comments, it appears that there was something wrong with the way
in which I spoke. I'm sorry that I troubled the public and the
victims of the atomic bombs." Saying, "I won't make comments as I
did in the recent speech in the future," Kyuma in effect retracted
his controversial comments.

When he appeared on a Fuji-TV talk show earlier in the day, Kyuma
noted: "I don't think it is necessary to correct my comments. If
they gave a false impression, I must make a detailed explanation."
But he came under criticism even from senior members of the ruling
parties. Hidenao Nakagawa, secretary general of the ruling Liberal
Democratic Party (LDP), who joined the talk show on the phone, also
advised Kyuma: "You had better retract your comments." Afterwards,
heeding the Kantei's concern about a possible impact on the Upper
House election, Kyuma appeared to change his attitude.

Shoichi Nakagawa, chairman of the LDP Policy Research Council,
stressed; "My perception is different from his. He should give a
proper account and he should apologize if necessary." The junior

TOKYO 00002982 002 OF 007


coalition partner New Komeito's policy chief Tetsuo Saito, as well,
criticized Kyuma: "No cabinet member should make such comments. If
he made such comments in the context that the dropping of the atomic
bombs couldn't be helped, that simply rubbed the public the wrong
way." Following him, New Komeito's Public Relations Bureau Chief
Yosuke Takagi also pointed out: "Those comments are outrageous and
inappropriate in any case."

Opposition parties, as well, criticized Kyuma, with the major
opposition Democratic Party of Japan's (Minshuto) policy chief
Takeaki Matsumoto arguing, "The use of atomic weapons can never be
justified." The Japanese Communist Party's (JCP) policy chief Akira
Koike made this critical comment: "His comments were far from common
sense." The Social Democratic Party's policy chief Tomoko Abe called
for Kyuma's resignation.

At a press conference, Kyuma explained: "I wanted to say that we
need to see the other side's intention by explaining the background
that the United States, upon noticing that the Soviet Union was
going to join the war, dropped atomic bombs, but what I said was
taken to condone the dropping of atomic bombs." "I troubled my
colleagues in the party as well. I want to talk about this to
appropriate officials of both the LDP and New Komeito," Kyuma
added.

13) "Hodo 2001" aired on July 1: Defense Minister Kyuma says, "The
dropping of atomic bombs was not necessary"

SANKEI (Page 5) (Full)
July 2, 2007

Defense Minister Fumio Kyuma explained his recent controversial
comments that the dropping of atomic bombs "couldn't be helped."

-- What was the real intention of your comments?

Kyuma: "At a meeting (where I gave a speech), I was asked, 'Will
Japan be targeted if it lets its guard down?' I then cited the case
(of the US) to explain that we must discern the other side's
intentions. (During late days of World War II), Japan was unable to
conceive that the Soviet Union would join the war, but the United
States was aware of that intention of the Soviet Union and moved to
drive Japan into surrender by using atomic weapons. Our country
failed to see the Soviet Union's intention, but it's no use
lamenting this at present."

-- Do you think the dropping of atomic bombs could not be helped?

Kyuma: "No. I also said at the meeting that dropping the atomic
bombs was unnecessary. There's no use regretting past events.
Anyway, that put an end to the war, so we need to be reconciled to
that. I don't think I need to revise my comments, but if they gave a
misunderstanding, I must give a detailed account."

14) Defense minister apologizes for atomic bombing statement: Plans
to explain his intention to ruling parties

YOMIURI (Page 2) (Full)
July 2, 2007

Defense Minister Kyuma, elected for the Lower House from the
Nagasaki Constituency No. 2, commented in a speech given on July 30

TOKYO 00002982 003 OF 007


that the atomic bombings by the US of Hiroshima and Nagasaki could
not have been helped. Concerning this comment, he held a press
conference at yesterday noon at a hotel in Shimabara City, Nagasaki
Prefecture and offered an apology: "I feel very sorry for the people
of Nagasaki, Hiroshima, and all over Japan. I will never ever make
such a comment in the future."

Prior to this press conference, LDP Secretary General Hidenao
Nakagawa yesterday morning phoned Kyuma and advised him, "If you go
to Nagasaki, you'd better make an apology." New Komeito head Ota
also told Chief Cabinet Secretary Shiozaki on the phone, "It will be
no good if Kyuma does not properly offer an apology to the public or
convey his true meaning." Voices calling for an early apology from
Kyuma have thus been growing in the party with the Upper House
election just ahead.

During the press conference, Kyuma acknowledged that his comments
were careless, noting, "I did not mean to defend the US decision to
drop the bombs. I wanted to say that there is no turning back if we
fail to see the other party's true intention regarding peace and
security. However, I could have made that point without referencing
the atomic bombings. When I said that they were unavoidable, I meant
that the US made the decision to use atomic weapons to end the war.
Such a comment has given rise a serious misunderstanding. To begin
with, I should not have used such words."

Asked about his future approach, he said: "The more I explain my
true intention, the more the situation becomes chaotic. What has
been said cannot be undone. I cannot condone the atomic bombings of
Hiroshima and Nagasaki. I will continue to firmly maintain my basic
stance toward the elimination of nuclear weapons. I would like
people to watch my actions." He also indicated his plan to explain
shortly what he really meant to the ruling parties, saying: "I have
caused trouble to the ruling parties. It was careless of me to make
a comment that opponents can use."

Following Kyuma's apology, Nakagawa yesterday afternoon told
reporters in Miyazaki City, "I take it as an apology to the people."
He thus indicated his stance of trying to end the issue over his
comments. Asked about the possible impact of Kyuma's comments on the
upcoming Upper House election, he said, "Since he offered an
apology, there will be no serious impact."

15) Abe: "Making any comment that gives a false impression should be
avoided"; Ozawa: "The government should demand an apology from the
US for dropping atomic bombs"

YOMIURI (Page 2) (Full)
July 2, 2007

Referring to Defense Minister Kyuma's comment that the atomic
bombings by the US could not have been helped, Prime Minister Abe
during a meeting with Democratic Party of Japan (DPJ or Minshuto)
head Ozawa expressed his position that Kyuma's comment was
inappropriate. He said, "We must be careful so as not to make any
comment that could give a false impression to the public." He made
this reply to a question asked by Ozawa. Ozawa said: "Mr. Kyuma
spoke for the US. It was inappropriate for any state minister to
make such a comment."

However, the prime minister at the same time touched on Kyuma's
apology for his comment. He indicated his position of not addressing

TOKYO 00002982 004 OF 007


opposition parties' demand for his dismissal, noting: "Mr. Kyuma is
also a citizen of Nagasaki Prefecture. I must have him display his
ability as defense minister to eliminate nuclear arms."

Ozawa called on the government to demand an apology from the US,
pointing out: "The government should seek an apology from the US for
the dropping of atomic bombs. It should hold talks with the US." Abe
responded, "Our responsibility is to do our utmost to eliminate
nuclear arms instead of pouring our energy into demanding an apology
from the US."

16) Abe, Ozawa lock horns in debate ahead of Upper House election;
Abe plays up his administration's economic, educational
achievements, Ozawa calls for reversal of positions of ruling and
opposition parties

YOMIURI (Top play) (Abridged slightly)
July 2, 2007

Prime Minister Shinzo Abe and Minshuto (Democratic Party of Japan)
President Ichiro Ozawa took part in a party-head debate, held
yesterday at a Tokyo hotel by Atarashii Nihon o Tsukuru Kokumin
Kaigi (The People's Council for Building a New Japan) composed of
academics and business leaders. In his debate with Ozawa, Abe
indicated that he would play up his administration's achievements in
the economic and education fields in the upcoming House of
Councillors election. Ozawa, on the other hand, expressed his
eagerness for a two-party system to take over the reins of
government through the upcoming election. Timed with the party-head
debate, private organizations, including the Japan Association of
Corporate Executives, released their evaluations of campaign pledges
by the Liberal Democratic Party, Minshuto, and the New Komeito.

Abe and Ozawa have taken part in four Diet debates, but each one
lasted only 45 minutes. With yesterday's debate set for 90 minutes,
the two were able to engage in an in-depth exchange of views ahead
of the election.

Abe first talked about the pension recordkeeping errors, saying
resolutely, "The government's checks will continue until the very
last record has been verified, guaranteeing overdue payouts. We will
clarify the responsibility of the people that caused the problem and
resolve the matter."

Ozawa in response slammed the government, saying: "The Upper House
election is a referendum on whether people trust the pension system.
The voter will decide whether they trust the government. If they
don't, the government has to change."

Minshuto proposed covering the basic pension with taxes. In the 2005
House of Representatives election, the party promised to raise the
consumption tax rate by 3 % to secure financial resources, but it
retracted the pledge after Ozawa became leader. Abe attacked the
largest opposition party for backpedaling, saying that using taxes
to cover the basic pension would not be possible without raising the
consumption tax rate.

Ozawa said that if the government canceled all the state subsidies,
it would have financial resources amounting to more than 6 trillion
yen. Abe brushed aside such an idea, saying that Ozawa was
irresponsible because two-thirds of the state subsidies were used
for programs related to social security. "Do you want to cut

TOKYO 00002982 005 OF 007


subsidies for social security-related programs?" Abe said.

Abe sparred with Ozawa in the debate without using notes in a show
of determination to address the pension mess and improve his falling
approval rating. Ozawa, who describes himself as rhetorically
ungifted, used notes for the debate.

Ozawa highlighted the need to reverse the positions of the ruling
and opposition parties, saying, "If the LDP wins the election,
two-party democracy will never take root in this country."

Meanwhile, Abe played up his administration's achievements, saying,
"We have created 600,000 jobs, reduced the unemployment rate to
below 4 % , revised the Basic Education Law, and upgraded the
Defense Agency to ministry status."

Although Abe said that the Upper House election is not a referendum
on his government, he also added, "The people will be asked who is
more suited -- Mr. Ozawa or myself -- to be at the helm of
government."

17) Gov't panel to propose collective self-defense, eyeing rocksolid
ties with US

YOMIURI (Page 2) (Abridged)
June 30, 2007

A government panel, the Council for Rebuilding the Legal Foundation
of National Security, decided yesterday to propose changing the
government's constitutional interpretation to allow Japan to
exercise the right of collective self-defense. This proposal is in
line with Prime Minister Abe's strong awareness that Japan's
alliance with the United States cannot exist without Japan's strong
relationship of mutual trust with the United States.

The panel has been discussing four cases over the advisability of
exercising the right of collective self-defense. In its last
meeting, the panel discussed two of the four cases. One is to defend
US naval vessels on the high seas, and the other is about missile
interception. The focus of discussions over these two cases was on
what kind of logical composition would make it possible to exercise
the right of collective self-defense. In particular, intercepting
missiles headed for the United States was the core of discussions in
connection with collective self-defense. That is because the
government, in its conventional view, has taken the position that
intercepting a ballistic missile bound for another country could
fall under the category of collective self-defense.

The government once released a statement in the name of Chief
Cabinet Secretary Fukuda on its decision to introduce a missile
defense (MD) system. In that statement, the government took the
position that the problem of collective self-defense would not arise
because Japan's MD system would not be used to defense any third
country.

In its meeting yesterday, the panel discussed the advisability of
intercepting US-bound missiles for two different cases: 1) if a
missile passes across over Japan and flies to Hawaii or other
non-CONUS (continental United States) US territories; and 2) if a
missile does not pass across over Japan and reaches CONUS. The panel
generally concurred on allowing Japan to exercise the right of
collective self-defense and intercept such US-bound missiles as much

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as possible.

18) Foreign Minister Aso tells Iran's deputy foreign minister,
"Transparency needed for nuclear issue"

YOMIURI (Page 4) (Full)
June 30, 2007

Foreign Minister Taro Aso met on June 29 at his ministry's office
with Iran's Deputy Foreign Minister Mehdi Safari. Referring in it to
Iran's nuclear development program, Aso urged Teheran to abide by a
UNSC resolution calling on Iran to suspend the country's
uranium-enrichment program, as well as disclose information on its
nuclear program. Aso told Safari: "Your country should not be
isolated from the international community. Transparency is needed
for your country to gain international trust." Safari then
responded: "Our country has consulted with the International Atomic
Energy Agency (about the nuclear issue)."

19) LDP lawmakers sending letter to US Congress letter urging
resolution on wartime comfort women be put off

TOKYO SHIMBUN (Page 2) (Full)
June 30, 2007

A group of ruling Liberal Democratic Party (LDP) lawmakers belonging
to the "Forum to think about the future of Japan and history
education" decided on June 29 to send to US House of Representatives
Speaker Nancy Pelosi and other US congressional leaders letters
asking that a vote on a resolution demanding an apology from the
Japanese government for former the wartime comfort women not be
taken. The US House of Representatives' Foreign Affairs Committee
adopted the resolution on June 26. The outlook is that the
resolution will likely be approved at a plenary session of the
House.

20) Nixon knew of secret agreement in connection with return of
Okinawa

MAINICHI (Page 2) (Full)
July 2, 2007

Washington, Jiji

In connection with a secret agreement between Japan and the United
States on Japan's payments to the US for the reversion of Okinawa, a
memo from then Secretary of the Treasury Kennedy to then President
Nixon was found in the National Archives of the US. The memo notes:
"Our profits reached 685 million dollars in total." Although the
amount of money itself had already been revealed, a memo showing
that the US president had been informed of the Japan-US secret
agreement and its contents was found for the first time.

The memo does not bear the date when it was drawn up, but the memo
supposedly was written in mid-November 1969, immediately after Japan
and the US signed a deal secretly, according to its contents.

The secretary of the treasury noted in the memo, "The success of the
US is owing to the adoption of a package payment formula,"
indicating that Japan made the payment without any grounds.

21) Government to privatize JETRO as part of reform of independent

TOKYO 00002982 007 OF 007


administrative agencies

SANKEI (Page 2) (Excerpts)
June 30, 2007

The government decided yesterday to privatize the Japan External
Trade Organization (JETRO), which is engaged in helping bring in
foreign firms and expanding Japanese firms' exports, as part of the
reform of independent administrative agencies. By plunging the
scalpel of reform into JETRO, a symbolic landing place for retired
amakudari officials, the government aims to accelerate reforming all
the 101 independent administrative bodies.

Most of the services offered by JETRO are said to be the same as
those provided by private-sector trade-related consultant companies.
Given this, the government has judged that it is no longer necessary
to keep JETRO under state control. In addition, an increasing number
of officials in the government began to pose questions about the
system of subsidizing businesses given the current austere fiscal
situation.

JETRO was established in October 2003 as the successor body of the
Japan External Trade Recovery Organization. The government provides
about 27 billion yen in subsidies to JETRO.

SCHIEFFER

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