Cablegate: Japanese Morning Press Highlights 08/28/07

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DEPT FOR E, P, EB, EAP/J, EAP/P, EAP/PD, PA;
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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 08/28/07

Index:

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

Abe Cabinet re-launched:
4) Abe launches new cabinet with veteran Yosano as chief cabinet
secretary, Abe critic Masuzoe as health minister, and defense expert

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Nukaga as finance minister
5) Prime Minister Abe says he will focus on rectifying income gap in
society, admits he shuffled cabinet because he could no longer take
responsibility for it
6) No change in "beautiful country" policy line: Abe
7) Biggest challenge for the new Abe cabinet will be passing the
bill extending the Anti-Terrorist Special Measures Law
8) New Defense Minister Komura says revision possible of bill
extending anti-terror law in order to get it passed by the Diet
9) New Foreign Minister Machimura: No change in giving top priority
to resolving abduction issue in North Korea policy
10) Abe appointed vocal critic Masuzoe to rid cabinet of image of
being filled with his friends
11) Though three cabinet members are not party faction members, the
cabinet overall reflects balance of LDP's conservative factions
12) Unusually long period for background checks of cabinet
candidates to make sure there were no hidden money scandals
13) Average age of cabinet is slightly younger than previous Abe
lineup
14) Former Prime Minister Mori cynically refers to new cabinet as a
scissors-and-paste compilation
15) Opposition parties all rap the new cabinet as lacking freshness,
resembling musical chairs, and still unable to read the mood of the
country

Defense issues:
16) China trying to get hold of missile defense information from
Japan: Former company president in Japan being questioned in
connection with possible breach
17) Aegis leaks came from MSDF lieutenant: police

18) Kyodo News issues rare retraction of article as false: There was
no meeting between Japanese and North Korean ambassadors

Articles:

1) TOP HEADLINES

Asahi:
Reshuffled Abe cabinet to revise reform policy to prolong
administration: Masuzoe as health, labor and welfare minister;
Former Iwate Prefecture Governor as internal affairs and
communications minister

Mainichi:
Party unity that gives consideration to factions and public opinion:
Yosano picked as chief cabinet secretary; Masuzoe as welfare
minister; Masuda as internal affairs minister

Yomiuri:
Cabinet reshuffle: Old-guard lineup aimed at buoying up
administration: Machimura as foreign minister; Komura as defense
minister

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Nikkei:
Heavyweights appointed for party unity: Nukaga as finance minister

Sankei:
Reshuffled Abe cabinet: Abe picks technocrats, giving up on
preferred lineup

Tokyo Shimbun:
Old guard picked: Importance also given to socioeconomic disparities
between urban and rural districts

Akahata:
Reshuffled Abe cabinet launched: Sticks to constitutional revision,
structural reforms; No reflection of people's judgment

2) EDITORIALS

Asahi:
(1) Reshuffled Abe cabinet launched: What is it going to do without
Abe imprint?

Mainichi:
(1) Priority given to Diet instead of Abe imprint: Still on edge of
precipice

Yomiuri:
(1) Vigorously push forward necessary policies

Nikkei:
(1) Reshuffled Abe cabinet has its back against the wall: The only
way out can be found in reform initiative

Sankei:
(1) Reshuffled Abe cabinet sticks to reform policy with concerted
efforts
(2) Old-guard lineup to face opposition-dominated Diet

Tokyo Shimbun:
(1) Reshuffled Abe cabinet launched: Can it wipe away sense of
belatedness?

Akahata:
(1) Abe failed to responded to people's judgment in reshuffling his
cabinet

3) Prime Minister's Official Residence (Kantei)

Prime Minister's schedule, August 27

NIKKEI (Page 2) (Full)
August 28, 2007

08:53
Met at party headquarters with Foreign Minister Aso, Diet Affairs
Committee Chairman Nikai, and Deputy Secretary General Ishihara.
Joined by Internal Affairs and Communications Minister Suga,
Secretary General Nakagawa, Party Ethics Committee Chairman

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Sasagawa, and Executive Council Chairman Niha.

10:03
Attended a special Executive Council meeting. Posed for a photo with

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new executive members. Later, attended an executive meeting.

11:03
Arrived at the Kantei.

13:03
ttended a special cabinet meeting. Followed by former Internal
Affairs and Communications Minister Suga.

15:33
Met New Komeito President Ota, with new Secretary General Aso and
New Komeito Secretary General Kitagawa present. Later, met Aso,
Upper House Chairman Otsuji, Ota and others. Had new cabinet members
join them.

17:03
Met Special Advisor Yamatani. Then met Special Advisor Nakayama.

19:01
Attended an informal representation at the Imperial Palace. Later,
attended an imperial attestation ceremony for the new cabinet
members.

21:00
Gave a press conference at the Kantei. Issues official appointments
to the cabinet members. Attended the first cabinet meeting.

2:05
osed for a photo with the new cabinet members.

22:27 Returned to his official residence.

4) New Abe cabinet launched, Yosano as chief cabinet secretary,
Masuzoe as health and welfare minister; All-party approach
emphasized

NIKKEI (Top play) (Full)
August 28, 2007

Prime Minister Shinzo Abe inaugurated a new cabinet last night,
appointing influential lawmakers as key ministers. For instance,
Kaoru Yosano, a veteran lawmaker known as a policy expert, was named
chief cabinet secretary, and House of Councilors policy chief Yoichi
Masuzoe, who has been critical of Abe, was appointed as health,
labor and welfare minister in charge of pension and other issues.
The appointments of factional leaders to major cabinet posts
apparently reflect Abe's effort to achieve unanimity in the party.
Although Abe is aiming to revamp his administration with the new
cabinet lineup, whether or not he can settle mounting outstanding
issues and regain momentum remains to be seen, given the
opposition-controlled Upper House.

In hopes of doing away with the widely criticized "clubby" image of
his first cabinet, Abe this time has given key cabinet posts to
experienced, veteran lawmakers, appointing Nobutaka Machimura who
heads his own faction as foreign minister, Masahiko Komura who also
heads his own faction as defense minister, and Fukushiro Nukaga, who
is deputy chief of the Tsushima faction, as finance minister. Abe
has also decided to retain Education, Science and Technology
Minister Bunmei Ibuki who heads his own faction.

Yasuhisa Shiozaki, Abe's close aide who served as chief cabinet

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secretary, has not joined the new cabinet, and the number of prime

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ministerial advisors has also been reduced from the five to two.

Importance is placed on the government's efforts for addressing the
pension issue and the growing socioeconomic disparities between
urban and rural areas that contributed to the ruling bloc's crushing
defeat in the July Upper House election. In view of popular will,
the prime minister has appointed Masuzoe, who has repeatedly
criticized Abe, as health, labor and welfare minister. Former Iwate
governor Hiroya Masuda was also named internal affairs and
communications minister and state minister in charge of correcting
regional disparities to push ahead with decentralization.

Only two have joined the new cabinet from the private sector --
Masuda and Hiroko Ota, who will continue to serve as state minister
in charge of economic and fiscal policy. The new cabinet also
includes only two female members -- Ota and Yoko Kamikawa, who has
become state minister in charge declining birthrate.

In addition, five will retain their posts, including Economy, Trade
and Industry Minister Akira Amari, Construction and Transport
Minister Tetsuzo Fuyushiba, and State Minister in Charge of
financial Policy and Administrative Reform Yoshimi Watanabe. The
number of new faces which was 11 when the Abe cabinet was first
launched last September has dropped to seven.

In terms of the number of posts assigned to factions, the Tsushima
faction has the most with three, followed by the Koga and Yamasaki
factions with two each. Previously, the Machimura faction held four
posts, but it now holds only one. No one from the Tanigaki faction
has joined the new cabinet.

5) Abe determined to fire cabinet ministers unable to fulfill
accountability regarding "politics-and-money" issue, give more
consideration to regional disparities

NIKKEI (Page 1) (Abridged slightly)
August 28, 2007

Prime Minister Shinzo Abe, after reshuffling his cabinet, held a
press conference last night at the Kantei (Prime Minister's Official
Residence). The prime minister expressed his determination to revamp
his administration, stating: "In order to restore public trust in
politics and the government, I will do my best with the new cabinet
ministers and to make achievements." About his response to the
question of money and politics, Abe indicated that he would
discharge those who fail to fulfill their accountability, saying:
"The new cabinet ministers are ready to quit if they cannot offer
appropriate explanations."

Abe also made it clear that he would place high priority on
addressing the issue of growing disparities between urban and rural
areas, saying: "Politics must give more consideration to this
problem, and that is what we have learned from the July House of
Councillors election. We must consider ways to alleviate pain
associated with reform. We must work harder than before."

At the same time, Abe emphasized that he would continue with his
reform policy course, noting: "Reform is essential for Japan. I will
continue to pursue reform no matter how difficult it may be." Abe
also made this statement about his administration's basic policy
lines, such as breaking away from the postwar regime: "We will

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review the postwar system by returning to the starting point."

He also revealed a plan to revise relevant legislation to establish
strict rules to deal with the question of politics and money,
saying: "We will work hard to increase transparency. We will have to
revise the Political Funds Control Law."

6) Prime Minister Abe: "Beautiful country" policy remains unchanged

TOKYO SHIMBUN (Page 29) (Slightly abridged)
August 28, 2007

In a press conference at the Prime Minister's Office starting at
9:00 p.m., Prime Minister Abe in a morning suit said in a calm tone:
"I reorganized my cabinet in order to restart reforms to create a
'beautiful country,' a 'new country.'" He had not referred to
"beautiful country" in the public since his party suffered a
crushing defeat in the July House of Councillors election.

Reflecting on the fact that his "beautiful country" policy,
represented by constitutional revision, was not understood by the
people, the prime minister had sealed this policy in effect. His
first reference to the policy after many days supposedly was
intended to underline that he has made no policy switch. Regarding
his slogan of "emerging from the postwar regime," as well, at which
even Liberal Democratic Party members lashed out, Abe stressed:
"There is no change in my intention to review such postwar systems
as the education and public servant ones."

Upon saying: "Politicians should have given more consideration to
the disparities between central and local governments," the prime
minister emphasized: "In order to ease the pains from reforms, we
must make more efforts than before."

The prime minister also included the wording "beautiful country,
Japan" in a statement adopted in the first cabinet meeting held
afterward, as well as in the new cabinet's policy guidelines.

7) Question of extension of antiterrorism law likely to be first
challenge for reshuffled Abe cabinet

YOMIURI (Page 4) (Excerpts) (Full)
August 28, 2007

The first hurdle for the reshuffled Abe cabinet will be the upcoming
extraordinary session of the Diet to be opened next month. The focus
of debate in the extraordinary Diet session will be the question of
extending the Antiterrorism Special Measures Law, which expires on
Nov. 1. The government and the ruling parties want to extend the law
by revising it, but the major opposition Democratic Party of Japan
(DPJ or Minshuto), the first party in the Upper House, has made
clear its opposition to the extension. An intense battle between the
ruling and opposition parties is bound to occur.

Nobuteru Ishihara, who yesterday assumed the post of chair of the
ruling Liberal Democratic Party's (LDP) Policy Research Council,
referred to that law at a press briefing and emphasized his attitude
to consult with the DPJ on the law, telling reporters: "The question
of extending the law concerns other countries' confidence in Japan.
We'll fully explain the law in the Diet to make the public
understand it. Some DPJ members are in favor of extending the law,
so we want to discuss the law in detail with the DPJ."

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During the extraordinary Diet session after the LDP lost a majority
of seats in the Upper House election in 1998, Ishihara worked at the
forefront of promoting consultations with junior DPJ members in
order to enact into law a set of bills intended for financial
revitalization. At the time he was dubbed as a new breed of
policy-planners.

But, given that the DPJ now holds the key posts related to the
conduct of proceedings in the Upper House like the president and the
chair of the steering committee, Ishihara is likely to face much
more difficulties in doing so than he did in 1998.

8) Defense chief implies revisions to antiterror law

YOMIURI (Page 2) (Full)
August 28, 2007

Defense Minister Komura, meeting the press yesterday, indicated that
he would be flexible about retouching a bill extending the
Antiterror Special Measures Law. The leading opposition Democratic
Party of Japan (Minshuto) is likely to call for the ruling coalition
of the Liberal Democratic Party and New Komeito to revise the
legislation. "I think there also can be revisions," Komura said. He
also said, "I'm not in a position to say there must be no revision."
He added, "The cabinet is going to study whether to go on as is or
whether to incorporate the DPJ's views."

9) Abduction issue to remain priority in regard to policy toward
DPRK: Foreign Minister Machimura

NIKKEI (Page 2) (Full)
August 28, 2007

The reshuffled Abe cabinet's focus in the foreign policy and
security fields will be on North Korea's nuclear and abduction
issues and bringing progress to the realignment of US Forces in
Japan. Prime Minister Abe will aim at pursuing vocal diplomacy with
the appointment of Nobutaka Machimura, chairman of the faction to
which he belonged and whose political creed is close to his, as
foreign minister. However, it is unclear whether Abe can shore up
his administration using foreign and security policy, because all of
pending issues in that area are thorny problems.

The foreign minister during a press conference after the first
cabinet meeting yesterday evening stressed, "If the abduction issue
makes progress, it would be possible for Japan to play a more
positive role in such areas as economic and energy aid." He thus
indicated his stance of abiding by the government's basic principle
that there will be no aid without progress in the abduction issue.

Tokyo and Pyongyang are undertaking coordination with the
possibility of holding a normalization working group meeting as
agreed upon during the six-party chief delegates' meeting in July.
The government is envisaging a strategy of eliciting a sincere
response from Pyongyang regarding the abduction issue, even by
putting the issue of settling past accounts on the negotiating
table.

North Korea is persistently criticizing the prime minister for his
hard-line stance. Washington and Pyongyang are visibly getting
closer to each other over the nuclear issue. There is a growing mood

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at the six-party talks for giving priority to the nuclear issue. As
such, bringing progress to the abduction issue will not be an easy
job.

Another challenge is the realignment of US Forces in Japan, which
includes the issue of relocating the US Marine Corps' Futenma Air
Station in Okinawa Prefecture. The Defense Ministry on Aug. 7
submitted an environmental impact assessment method report, the
first step of formal procedures for the relocation of the Futenma
Air Station. The report included a facility plan for a steady
implementation of the relocation scheme based on the Japan-US
agreement.

However, the prefecture has withheld the acceptance of the report,
demanding a revision of the Japan-US agreement. Relations between
the government and Okinawa Prefecture have become strained, giving
rise to a secret deal rumor that former Defense Minister Yuriko
Koike sought understanding for the submission of the report in
return for the dismissal of then Vice Defense Minister Takemasa
Moriya, who had been taking a hard-line stance toward Okinawa.

In order to complete the relocation, it is absolutely necessary for
the government to obtain understanding from the local community.
Machimura and Defense Minister Masahiko Komura yesterday evening
confirmed their determination to aim at bringing progress to the
issue in cooperation.

10) New Abe cabinet takes critic Masuzoe into cabinet, aiming to
erase image of "friend cabinet"

TOKYO SHIMBUN (Page 29) (Excerpts)
August 28, 2007

The support rating for the administration remains at a low level
since one cabinet member after another stepped down due to
office-expense scandals and gaffes. Under such a situation, the new
Abe cabinet was launched yesterday, about one month after the
Liberal Democratic Party's historic defeat in the July House of
Councillors election. Prime Minister Abe took lawmakers critical of
his administration, as well as a former Iwate governor, into the
cabinet in a bid to play up his determination to tackle the issue of
disparities between urban and local areas. By appointing such
lawmakers, the prime minister aims to erase the image of a "friend
cabinet," but in on-the-street interviews, many expressed negative
views about the new cabinet, with one saying: "It is intended to
court public favor;" and another remarking: "It conveys no message."
The prime minister stressed in an interview his determination to
forge ahead with his reform plans, including building a "beautiful
country," which was rejected by the voters in the Upper House
election. New cabinet members, including LDP leading members, spoke
in press conferences yesterday of their aspiration to make efforts
to recover public trust, but it will be a tough "second challenge"
for the prime minister.

Yoichi Masuzoe, who was sharply criticizing the Abe cabinet in the
LDP, was appointed to head the Health, Labor and Welfare Ministry.
In a press conference after the announcement of the new cabinet
lineup, Masuzoe made this explanation about why he accepted the
offer from Prime Minister Abe: "It is now necessary for all party
members to work together to reconstruct their party."

Whenever controversy over cabinet ministers' gaffes occurred,

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Masuzoe gave candid advice to the prime minister, saying: "If you
keep silent, the people will leave you." When Abe expressed his
intention to stay in power before the result of the count was
announced in the earlier Upper House election, Masuzoe criticized
the prime minister, saying: "He does not understand what society
sees as common sense."

By getting Masuzoe into the cabinet, the Prime Minister's Office
(Kantei) apparently aims to eliminate the image of a "cabinet being
filled with the prime minister's close friends."

Some might say that Masuzoe was drawn into such a plot of the
Kantei, but he emphasized: "(My words and deeds) do not stem from my
personal feelings, such as that I dislike this or that minister or
the prime minister."

All the more because he made up his mind to go into politics, based
on his experience of taking care of his mother, he appears to be
excited about attaining the top post for health, labor and welfare
administration. He commented: "The government must correct what must
be corrected, including the pension issue. Since such a role has
been awarded to me, I will do my best. It will be my responsibility
to the voters."

11) Three with no factional affiliation assume key cabinet
portfolios

NIKKEI (Page 4) (Excerpts)
August 28, 2007

The average age of ministers of the new Abe cabinet is 60.4,
slightly younger than the 60.9 of the previous Abe cabinet, which
was inaugurated last September. The youngest minister is Fumio
Kishida, state minister in charge of Okinawa and Northern
Territories, who is 50. Land, Infrastructure and Transport Minister
Tetsuzo Fuyushiba, 71 years old, is the oldest minister in the
reshuffled Abe cabinet.

The number of cabinet ministers (excluding the prime minister) is
17, which is the same as that of the first Abe cabinet. Of the 17
ministers, only one came from the New Komeito. The number from the
private sector is two: Hiroko Ota, state minister in charge of
economic and fiscal policy, and Internal Affairs and Communications
Minister Hiroya Masuda. Female ministers are Ota and Yoko Kamikawa,
state minister in charge of population and gender-equality issues.

Three ministers came from the Tsushima faction, giving that faction
the largest number of cabinet seats. No Tsushima faction members
were in the cabinet before Abe shuffled it because both Defense
Minister Fumio Kyuma and Administrative Reform Minister Genichiro
Sata had stepped down from their posts.

Three lawmakers who do not belong to any faction in the Liberal
Democratic Party (LDP) were given cabinet portfolios. The three are
Chief Cabinet Secretary Kaoru Yosano; Yoichi Masuzoe, health, labor
and welfare minister -- responsible for pension system reform,
including the pension record-keeping debacle; and Administrative
Reform Minister Yoshimi Watanabe.

Abe appointed Nobutaka Machimura as foreign minister. Machimura is
the only one member who assumed a cabinet post from the largest LDP
faction, headed by Machimura. The Machimura faction did not get any

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LDP executive posts. The Koga faction got only two cabinet posts,
decreasing from four.

Abe gave no cabinet post to the Tanigaki and Aso factions. However,
there is a big difference in the situations between the Aso faction,
whose leader, Taro Aso, became chief cabinet secretary, and the
Tanigaki faction, which has never had a cabinet post under Abe. Both
Aso and Tanigaki ran in the LDP presidential election last
September. The Tanigaki faction has been treated unkindly in terms
of Abe's appointments.

Number of cabinet ministers picked from LDP factions

Faction Number of cabinet ministers Increase or decrease from the
first Abe cabinet
Machimura 1 -3
Tsushima 3 +1

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Koga 2 -2
Yamasaki 2 +1
Ibuki 1 -1
Tanigaki 0 0
Aso 0 -1
Komura 1 0
Nikai 1 +1
Nonaffiliated 3 +3

N.B. Prime Minister Abe excluded. One New Komeito member and two
politicians not included.

12) Unusually long time taken for "checkups"

MAINICHI (Page 2) (Excerpts)
August 28, 2007

One of the buzzwords in the cabinet reshuffle this time was
"politics and money." In Nagata-cho (Japan's political center), it
took "unprecedentedly long time," according to a government source,
to do a checkup on potential candidates for cabinet posts. If some
problem was found with one candidate, even if it were a minor fault,
the candidate reportedly was removed from the list.

A symbolic case is former House of Councillors Tetsuro Yano of the
Liberal Democratic Party, who was viewed as certain to join the
cabinet but did not. Yano, upset at the decision, made a phone call
to Chief Cabinet Secretary Kaoru Yosano last night, asking why he
was not picked." Since Yosano gave no clear reply, Yano called a
secretary to Prime Minister Shinzo Abe. Abe called back to Yano,

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saying: "A problem was found in a 'checkup (related to a politics
and money problem)'

In the Abe cabinet, which was inaugurated last September, a number
of politics-and-money scandals cropped up in succession. Should a
new scandal involving a new cabinet member emerge, it might prove to
be the administration's eventual downfall. The prime minister
reportedly gave priority to "innocence" in selecting cabinet
members.

13) First-time ministers decrease; Average age of cabinet ministers
drops

SANKEI (Page 5) (Full)
August 28, 2008

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The number of first-time ministers of the reshuffled cabinet of
Prime Minister Shinzo Abe is seven (including non-politicians), down
from the 11 -- the largest number -- after the realignment of
central government offices in January 2001. Abe retained five
ministers in their posts and appointed five lawmakers who had
previously served in cabinet posts. Compared to the previous Abe
cabinet, which was ridiculed as a cabinet made up of friends of Abe,
the prime minister appears to have picked veteran lawmakers.

The average age of cabinet ministers is 60.4, which is six months
younger than that of the previous cabinet. The youngest minister is
Fumio Kishida, minister in charge of Okinawa and Northern
Territories, while the oldest minister is Tetsuzo Fuyushiba,
minister of land, infrastructure and transport.

Justice Minister Kunio Hatoyama has been elected 10 times to the
House of Representatives, the most among the cabinet ministers. Yoko
Kamikawa, state minister in charge of declining birthrate and
gender-equality issues, is now serving in her third term, making her
the shortest-serving Diet member in the cabinet. The average number
of times elected to the Diet is 6.8 terms, almost the same as 6.5
terms of the previous cabinet.

The number of cabinet ministers who have served more terms than
(Prime Minister Abe's five terms), is nine, down two from the
previous cabinet. Of the 18 cabinet ministers, seven are now serving
their eighth term in the Diet.

Two non-politicians -- Economic and Fiscal Policy Minister Hiroko
Ota and Internal Affairs and Communications Minister Hiroya Masuda,
the former Iwate governor -- were appointed.

Abe picked three Tsushima faction members, two members each from the
Koga and Yamasaki factions, one member each from the Machimura,
Ibuki, Komura, and Nikai factions, and three nonaffiliated persons
as cabinet ministers. He did not name any members from the Tanigaki
and Aso factions.

Six ministers -- the largest number -- are graduates of the
University of Tokyo. Nine ministers graduated from national
universities. The number of female ministers is two, the same number
as that of the previous Abe cabinet.

14) Mori sarcastically portrays reshuffled cabinet as "being biased
in favor of 'family' members"

YOMIURI (Page 4) (Full)
August 28, 2007

Evaluation of the reshuffled cabinet and the new leadership of the
ruling Liberal Democratic Party is divided even in the LDP.

Former Prime Minister Mori of the LDP yesterday said in a speech in
Kobe City: "Mr. Ishihara (chair of the LDP Policy Research Council),
Mr. Watanabe (Minister in Charge of Financial Services), and Mr.
Amari (Minister of Economy, Trade and Industry) are left in the
major posts. The previous cabinet had younger members called
'children' and it was called a 'cabinet of friends.' In other words,
they were a group of 'juniors,' and the current one consists of a
little bit 'older' friends." Mori thus sarcastically described the
reshuffled cabinet as "being biased in favor of family members."

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Referring particularly to Policy Research Council Chairman Ishihara,
Mori said: "If (Abe) intends to attach importance to rural areas, I
hoped to see someone elected in a rural area be chosen as chair of
the Policy Research Council Chairman. In this sense, it's bad."

Meanwhile, Secretary General Aso told reporters: "I think the
reshuffled cabinet and the new LDP leadership would gradually widen
support as time goes by."

15) Opposition parties all criticize reshuffled cabinet

TOKYO SHIMBUN (Page 2) (Full)
August 28, 2007

Opposition parties yesterday all criticized the reshuffled cabinet
and the new lineup of the ruling Liberal Democratic Party (LDP). One
opposition party leader said, "They can't change public sentiment."
Ahead of an extraordinary session of the Diet to be convened in the
fall, opposition parties are gearing up to pursue hard the
government and the ruling bloc, including Prime Minister Abe, who
reshuffled the cabinet and the LDP leadership, in terms of the
ministers' qualifications for the posts.

The major opposition Democratic Party of Japan's (DPJ or Minshuto)
Secretary General Yukio Hatoyama said to reporters in Tokyo: "It's a

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surprise that there was no surprise regarding the selection." Also,
Hatoyama stressed: "Mr. Taro Aso, who was the first to declare his
support for Prime Minister Abe's intention to stay on in the post,
and like-minded persons assumed the three top (LDP) posts, and the
heads of factions have occupied the ministerial portfolios. These
lineups can't change public sentiment."

When asked whether to respond to consultations between the ruling
and opposition parties as called for by the ruling bloc over the
question of how to manage the Diet from now on, Hatoyama noted: "If
they expect to have the past consultations between the ruling and
opposition parties, in which both sides argued against each other in
public while being engaged in secret maneuvering behind the scenes,
things are not that simple." Speaking of Hiroya Masuda, who was
called a reformist governor and has now joined the reshuffled
cabinet, Hatoyama expressed concern: "Once he became a cabinet
member, he would be involved in sectionalism among ministries and
agencies and he would be affected by government offices' way of
thinking."

The Japanese Communist Party's Secretary General Tadayoshi Ichida
criticized the reshuffled cabinet at a press conference: "It's a
scratch cabinet by scraping up (kakiatsume) and bringing together
(yoseatsume) hawkish persons to install them in key posts. The vogue
expression at present is 'KY' (which means inability to sense the
atmosphere). In the sense of kakiatsume and yoseatsume, I call the
reshuffled cabinet the 'KY cabinet.'" The Social Democratic Party's
head Mizuho Fukushima told a press briefing: "Former cabinet members
are chosen to be ministers again but in different ministerial
portfolios. In this sense, I call the reshuffled cabinet a
'seat-changing cabinet' or a 'deja vu cabinet.' We'll endeavor to
make (this cabinet) the last one of the LDP."

The People's New Party's Secretary General Hisaoki Kamei casts doubt
on the reshuffled cabinet, by noting, "I don't think the policy
direction will change." The New Party Nippon issued a statement in
the name of Representative Yasuo Tanaka, in which Tanaka said: "Even

TOKYO 00003974 012 OF 013

if (Abe) simply declares he will continue reforms, if he fails to
make clear for whom he continues reforms, the public will further
move away from him."

16) China targeted MD info

SANKEI (Page 1) (Abridged)
August 28, 2007

A Chinese national associated with his home government is alleged to
have told a 56-year-old former Japanese trading company president to
secure Japan's special defense secrets (tokubetsu boei himitsu). In
this incident, China wanted to get confidential information about
Japan's joint research with the United States on technologies for a
missile defense (MD) system, sources revealed yesterday. The Chinese
official is said to have asked for information about the MD research
project and operational plans. The former trading house chief is
also suspected of having received orders from the People's
Liberation Army urging him to secure information. Police authorities
will question the former president, suspecting him to have violated
the Japan-US Information Security Law, which stipulates special
defense secrets.

In March 2005, the police authorities searched the former trading
company president's home and related locations to investigate
information leakage involving a 65-year-old former engineering
official of the Defense Agency, now the Defense Ministry. In that
incident, the former engineering official was suspected of having
removed documents for internal use only about the Maritime
Self-Defense Force's submarines. At the time, the police seized
directive documents written in Chinese with a description of
information China wanted about the MD research project. The police
later discovered that the directive documents had a description
telling the former trading house chief to collect information
falling under the category of special defense secrets.

The ex-trading house chief is alleged to have asked the former
engineering official to provide a research paper on special steel
used for submarine hulls. However, China needed it to improve the
capabilities of its submarines, such as evading the MD dragnet to
launch missiles from the sea. The research is closely related to
Japan's joint research with the United States on MD systems.

17) Aegis data leaked by MSDF lieutenant: police

YOMIURI (Page 35) (Abridged)
August 28, 2007

Kanagawa prefectural police and the Maritime Self-Defense Force's
shore police have been investigating Aegis vessel data leaks from
the MSDF. In this incident, they have concluded that a 48-year-old
lieutenant, who was an instructor at the MSDF's 1st Service School,
had removed a magnet-optical disk (MO) out of a desk of a
41-year-old lieutenant commander, who was the chief instructor at
the service school. The lieutenant did not ask for the lieutenant
commander's permission. The removed MO disk had contained data in
the category of special defense secrets (tokubetsu boei himitsu).
The lieutenant stated that he collected those data "for educational
purposes." The lieutenant was later assigned to the DDG Shimakaze.
The police have also discovered that the lieutenant had leaked data
to crewmen on board the destroyer.

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The lieutenant-currently assigned to the Guided Weapons Education
and Training Unit in Yokosuka, Kanagawa Prefecture-is suspected of
having violated the Information Security Law, which is incident to
the Japan-US Mutual Defense Assistance Agreement. Kanagawa police
and MSDF investigative authorities will search the unit and the DDG
Shimakaze today to hurry up their final-stage investigations to
indict the lieutenant and others involved in the incident.

According to investigations, the lieutenant removed an MO disk
containing Aegis vessel data from the lieutenant commander's desk
without permission between 2002 and 2003 when the lieutenant was an
instructor at the 1st Service School. The lieutenant copied the data
onto CDs, which were distributed to his students at the service
school and others who were not authorized to access confidential
information. He is therefore suspected of having leaked special
defense secrets. In police questioning, the lieutenant stated that
he removed the MO disk to collect data files for the purpose of
using them in his class at the service school. He gave those data
files to students. Asked why, he stated he thought the data files
would be useful in the future. At the service school, chief
instructors used to hand down Aegis vessel data and other data files
to their successors. The MO disk removed by the lieutenant had
contained highly confidential information secured by the lieutenant
commander from an MSDF Program Service Unit person the lieutenant
commander knows. The investigative authorities suspect that the
information falls under the category of special defense secrets.

18) Kyodo News retracts report on Japan-North Korea talks

SANKEI (Page 2) (Full)
August 28, 2007

The Kyodo News Service yesterday retracted its report dispatched in
the early hours of Aug. 27, citing a mistake in the report, in which
Kyodo wrote that the ambassadors of Japan and North Korea held an
informal meeting in Dalian, China.

The Japanese Ministry of Foreign Affairs denied the report yesterday
after reconfirming that Kyodo found that the person with whom it had
interviewed was not the ambassador.

Kyodo's editor in chief Kenji Goto said: "There was a mistake in the
report. We apologize to the ambassador and those concerned for
causing inconveniences."

MESERVE

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