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Cablegate: Japanese Morning Press Highlights 09/13/07

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UNCLAS SECTION 01 OF 15 TOKYO 004267

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DEPT FOR E, P, EB, EAP/J, EAP/P, EAP/PD, PA;
WHITE HOUSE/NSC/NEC; JUSTICE FOR STU CHEMTOB IN ANTI-TRUST DIVISION;
TREASURY/OASIA/IMI/JAPAN; DEPT PASS USTR/PUBLIC AFFAIRS OFFICE;
SECDEF FOR JCS-J-5/JAPAN,
DASD/ISA/EAPR/JAPAN; DEPT PASS ELECTRONICALLY TO USDA
FAS/ITP FOR SCHROETER; PACOM HONOLULU FOR PUBLIC DIPLOMACY ADVISOR;
CINCPAC FLT/PA/ COMNAVFORJAPAN/PA.

E.O. 12958: N/A
TAGS: OIIP KMDR KPAO PGOV PINR ECON ELAB JA

SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 09/13/07


Index:

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

Popular opinion:
4) Average citizens calling Abe's quitting post "irresponsible"
5) 74 PERCENT of the public give Prime Minister Abe low marks for
his year in office

Post-Abe moves:
6) LDP coordinating Sept. 19 as date for presidential election to
replace Abe; LDP Secretary General Aso to declare candidacy today
7) Some working on Chief Cabinet Secretary Fukuda to throw hat into
the LDP presidential ring, while others urging former Prime Minister
Koizumi to run

Why did Abe quit?
8) Abe exhausted by overseas trips; Told Aso on evening of 10th he
was quitting
9) Abe's physical condition deteriorated in August: Eating rice
gruel, even on IV

Ozawa's DPJ on the move:
10) Democratic Party of Japan (DPJ) to continue frontal attack on
government, hoping for an early dissolution of the Lower House and a
snap election
11) Abe's sudden resignation forcing DPJ to rethink strategy

Impact of Abe's quitting on foreign and security affairs:
12) Abe's sudden resignation to have a serious impact on foreign and
security policies, especially six-party talks and fate of
anti-terror legislation
13) Inevitable that MSDF refueling services will have to be halted,
as new anti-terror bill likely to be greatly delayed and DPJ not
budging on its opposition
14) Passage of new anti-terrorism law likely to be seriously
delayed, possibly until next year
15) Confusion in Washington over Abe's sudden resignation, but
expectation still high that MSDF refueling in the Indian Ocean can
be continued

16) With Abe suddenly quitting, economists and business leaders fear
stagnation in economic policy

Articles:

1) TOP HEADLINES

Asahi:
Choosing Abe successor appears to be contest between pro- and
anti-Aso groups; Presidential election on Sept. 19 or 25

Mainichi:
Aso to announce plan to run for LDP presidency today; Some eager to
back Koizumi

Yomiuri:
Full-fledged moves begin within LDP to pick new president; Aso
expected to announce candidacy on Sept. 14


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Nikkei:
Prime Minister Abe abruptly resigns, citing lack of public trust

Sankei:
Shocking Abe resignation (Part 1): Last hope crushed

Tokyo Shimbun:
Abe to step down; Coordination underway for presidential election on
Sept. 19; Aso expected to announce candidacy today

Akahata:
Prime Minister Abe abruptly decides to throw away his job,
administration

2) EDITORIALS

Asahi:
(1) Prime Minister Abe's decision to throw up his administration
appalling; Lower House dissolution must follow to determine new
administration

Mainichi:
(1) Lower House must be dissolved to end political turmoil resulting
from Abe's decision to throw up administration

Yomiuri:
(1) Dealing with aftermath of Abe's abrupt decision

Nikkei:
(1) Political turmoil after Abe's abrupt resignation announcement
sets off grave concern

Sankei:
(1) Prime Minister Abe to step down before delivering on
international pledge; Childish approach to running administration
raises questions

Tokyo Shimbun:
(1) Abe's resignation leaves LDP with two choices: going into
opposition or dissolving Lower House

Akahata:
(1) Prime Minister Abe to resign: No self-reflection until last

3) Prime Minister's Official Residence (Kantei)

Prime Minister's schedule, September 12

NIKKEI (Page 2) (Full)
September 13, 2007

09:50
Arrived at the Kantei.

12:11
Met Diet Affairs Committee Chairman Oshima and Diet Affairs
Committee Vice Chairman Kosaka. Later, met Chief Cabinet Secretary
Yosano.

13:03
Met Yosano, deputy chief cabinet secretaries Ono, Iwaki, and Matoba,
joined by Secretary General Aso, Executive Council Chairman Nikai,

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Policy Research Council Chairman Ishihara, Upper House caucus
Chairman Otsuji, Upper House Secretary General Yamasaki, and
Election Bureau Director General Suga.

13:59
Held a press conference.

14:35
Met Upper House member Nobuo Kishi.

15:41
Met Yosano.

16:47
Met former Financial Services Minister Yamamoto.

17:24
Returned to his official residence.

4) Abe is "irresponsible," voters say; some voters expect "next
prime minister"

MAINICHI (Page 26) (Excerpts)
September 13, 2007

Many voters are perplexed by Prime Minister Shinzo Abe's abrupt
announcement of his intention to resign. One voter said, "Why he
decided to resign at this point?" Another said, "He is
irresponsible." Another said, "It is only natural for him to step
down." Voters' choices for the next prime minister were Democratic
Party of Japan (DPJ) President Ichiro Ozawa, Liberal Democratic
Party (LDP) Secretary General and Health, Labor and Welfare Minister
Yoichi Masuzoe.

Takayuki Kishimoto, 56, a company employee, a resident of Shiroishi
Ward, Sapporo City, Hokkaido, said:

"I don't understand why he decided to step down at this period of
time. The issue of extending the Antiterrorism Special Measures Law
cannot be left unresolved. I don't understand his decision to resign
without paving the way for the enactment of the bill. The LDP and
DPJ should have thoroughly discussed the issue."

Regarding Abe's successor, Kishimoto said: "Under such a situation,
there will be probably nobody to run. I think the LDP has no choice
but to elect Secretary General Aso.:"

Taeko Hashimoto, 48, a part-time worker in Nishi Ward, Fukuoka City,
said: "I was surprised because I thought he would stay in the
premiership for a while." She works at a company. Of the company's
employers, 90 PERCENT are dispatched employees and part-time
workers. She has been increasingly unhappy with the gaps in wages
between the temporary and permanent employees. So she feels the
social and income disparities. She said, "Life did not get better
while Abe assumed the prime minister's post." She expressed hopes
for changes of government, saying:

"I couldn't understand what Abe was talking about because his
phrases about a beautiful country and moving away from the postwar
regime were abstract. I think a member of the DPJ should assume the
premiership after the Lower House is dissolved for a snap
election."

TOKYO 00004267 004 OF 015

Reiko Okada, 70, resident of Gifu City, criticized Abe, saying:

"It was natural for him to quit. It was too late. I felt the prime
minister's policies were very different from the people's desire. I
think there is problem in the contents of the revised Basic
Education Law such as the renewal of teaching credential."

Asked about who should be next prime minister, Okada replied: "I
want to let the DPJ assume the reins of government. If it fails to
get results, the public will have to thoroughly think abut which
party is better between the DLP and DPJ."

Shinji Ito, 30, a company employee in Chuo Ward, Osaka, said:

"When I was promoted to a supervisory position, I was once driven
into a corner. Seeing Abe who stayed in office under severe
criticism of his responsibility for the defeat in the Upper House
election, I was encouraged by him, so I thought I should hang on
there. I want him to fulfill his duty even though his efforts will
end in failure in extending the Antiterrorism Law."

Ito also said: "I would like to have Ozawa become next prime
minister. I hope he has no politics-and-money scandal. I want him to
bring about transparent politics."

5) Poll: 74 PERCENT give negative marks to Abe government over past
year

MAINICHI (Page 5) (Abridged)
September 13, 2007

A total of 74 PERCENT gave negative ratings to Prime Minister
Shinzo Abe and his cabinet over the past year, the Mainichi Shimbun
found from its face-to-face nationwide public opinion survey
conducted Sept. 7-9. Affirmative ratings totaled only 22 PERCENT .
In the survey, respondents were asked what they thought was wrong
about what Abe has done. In response, a total of 44 PERCENT picked
Abe's way of dealing with political scandals over money and gaffes
from his cabinet ministers, topping all other answers. Among other
answers, 20 PERCENT chose his decision to stay on as premier after
his ruling Liberal Democratic Party's rout in this July's election
for the House of Councillors. The Abe cabinet's support rate has
been staying low at around 30 PERCENT . In addition, his cabinet's
job performance has been also rated low. These factors can be taken
as having spurred Abe to move up his resignation.

Negative ratings for the Abe cabinet accounted for 91 PERCENT among
those who support the leading opposition Democratic Party of Japan
(Minshuto), 92 PERCENT among those who support the Japanese
Communist Party, and 88 PERCENT among those who support the Social
Democratic Party (Shaminto). Among those with no particular party
affiliation as well, negative ratings totaled 80 PERCENT . In the
case of those who support the ruling parties as well, negative
ratings totaled 51 PERCENT among LDP supporters and 59 PERCENT
among New Komeito supporters.

By age, negative ratings totaled 80 PERCENT among those in their
20s, topping all other age brackets, with 78 PERCENT each among
those in their 30s, 40s, and 50s, 69 PERCENT among those in their
60s, and 61 PERCENT among those aged 70 and over. As seen from
these figures, bitter ratings came from young and middle-age people.

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By gender, negative ratings totaled 76 PERCENT among men and 71
PERCENT among women.

6) Coordination underway for LDP presidential election on Sept. 19;
Aso may announce candidacy today; Move to urge Fukuda to run in
race

TOKYO SHIMBUN (Top Play) (Excerpts)
September 13, 2007

Prime Minister Shinzo Abe, president of the ruling Liberal
Democratic Party (LDP) announced his intention yesterday afternoon
at the Prime Minister's Official Residence to resign his post. He
stated: "I have found it difficult to press forward with my policy
without public support and confidence. I have to take responsibility
for such a situation and break the deadlock." The LDP has launched
coordination on a plan to formally announce on Sept. 14 the holding
of a presidential election on the 19th. Secretary General Taro Aso
will likely to announce his candidacy for the race as early as
today. There is a move in the LDP calling on former Chief Cabinet
Secretary Yasuo Fukuda to run in the race. The main opposition

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Democratic Party of Japan (DPJ) intends to strengthen its offensive,
strongly reacting against Abe's abrupt announcement about his
intention to step down. A new government will likely find it
increasingly difficult to dealing with the issue of extending the
Maritime Self-Defense Force's refueling operation in the Indian
Ocean in the ongoing session of the Diet, in which the opposition
camp controls the House of Councillors.

Abe said at the press conference yesterday the reason for his
decision to step down:

"DPJ President Ichiro Ozawa turned down my offer for a meeting with
him on the refueling issue. He has, however, criticized me for not
seeking the judgment of the people. So, I am determined that
changing this situation would be better served if I resign the
premiership. "

The outlook is that presidential candidates will compete to grab a
total of 528 votes -- 387 votes held by individual LDP lawmakers and
the remaining votes possessed by the 47 prefectural chapters, with
each chapter having three votes.

The House of Representatives had planned to hold the questioning
sessions by party representatives on Sept. 12-14. The ruling
coalition asked the opposition camp to withdraw that schedule and
the opposition accepted it.

7) Abe successor race: Intense maneuvering seen among factions
centering on Aso, Fukuda; Some calling for Koizumi's comeback

SANKEI (Page 1) (Excerpts)
September 13, 2007

All factions in the Liberal Democratic Party began making moves
yesterday to determine their candidates to replace outgoing Prime
Minister Shinzo Abe. Although Secretary General Taro Aso is regarded
as the frontrunner in the race, there is also growing momentum in
the party to field former Chief Cabinet Secretary Yasuo Fukuda. The
Tsushima and Tanigaki factions, for instance, are aiming to

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determine their candidates by staking their presence on the race.
Given the opposition bloc's continued control of the Upper House

TOKYO 00004267 006.2 OF 015


regardless of a change of government, there are even calls for a
comeback of former Prime Minister Junichiro Koizumi, the "gambler."
Political turmoil is likely to continue.

"A political vacuum must not be created. In order to fulfill our
political obligations toward the public, we must select the new LDP
president as soon as possible," Aso said in a press conference held
last evening after an emergency General Council meeting. About his
presidency, Aso simply said: "It's too early to ask that question
and too early to answer it." But he also said to his associates:
"The LDP is faced with an unprecedented crisis. Running away from it
is not an option for a person in politics." This suggests that Aso
has made up his mind to run in the race.

Aso is the prime candidate who can become the party's "election
face." He is also popular among the junior and mid-level LDP
lawmakers and local organizations that have been backing Abe's
break-away-from-the-postwar-regime policy course. At the same time,
his straight-talking manner has created many enemies.

He is on cat-and-dog terms with former Secretary General Koichi Kato
and former Vice President Taku Yamasaki. His relationships with
former Secretaries General Makoto Koga and Hidenao Nakagawa are also
icy. The latest cabinet shuffle has also caused discord between Aso
and former Prime Minister Yoshiro Mori. Additionally, the LDP
freshman lawmakers dubbed Koizumi children are becoming distrustful
of Aso over the question of reinstating former METI Minister Takeo
Hiranuma.

Meanwhile, the Machimura faction is moving toward fielding its own
candidate. Fukuda and Foreign Minister Nobutaka Machimura are likely
candidates. The faction's ultimate decision would significantly
affect the trend of the presidential race. If Fukuda joins the race,
chances are that it will become a duel between Aso and Fukuda, as
Koga, Yamasaki, Tsuhima and others searched for ways to replace Abe
with Fukuda after the July Upper House election. At the same time,
as there are "secret Aso fans" in the Koga, Yamasaki and Tsuhima
factions, the presidential election might accelerate the realignment
of LDP factions.

If Machimura runs in the race, other factions might also field such
members as Finance Minister Fukushiro Nukaga and former Finance
Minister Sadakazu Tanigaki. No one would win a majority in this
situation, and as a result, fierce political maneuvering is likely
to take place among the factions, such as joining hands between the
ones in the second and third place with an eye on a runoff.

Although Machimura flatly has denied his candidacy, his feeling
seems mixed as seen in a senior Foreign Ministry official's
prediction that he is going to be busy. Fukuda also said: "I don't
talk about the future. As a general argument, we must avoid a
political vacuum that would cause trouble for the general public."

Mori, who holds the key to the trend of the Machimura faction, will
hastily return to Japan this morning, cutting short his France tour.
Other factions seem to plan to determine their steps after
ascertaining the trend of the Machimura faction.

Meanwhile, 31 LDP members, mostly freshman lawmakers, calling for
Koizumi's comeback met at a Tokyo hotel last night and launched a
group to make Koizumi Abe's successor. (TN: Jiji Press reports this
morning that Koizumi has ruled out making a bid.)

TOKYO 00004267 007 OF 015

8) Worn out Abe decides to abandon premiership; Signs of deep
exhaustion after his overseas trip seen; Told Aso on 10th he would
quit

ASAHI (Page 2) (Excerpts)
September 13, 2007

Prime Minister Abe, whose political slogan was "a fighting
politician," decided to abandon the premiership just before engaging
in battle with the main opposition Democratic Party of Japan (DPJ)
in the Diet, where the DPJ controls the upper chamber. Days before
in Sydney, Abe declared, "I'll stake my position on (extending the
antiterrorism law)." Following this remark, Abe yesterday announced
his intention abruptly to resign. After a devastating defeat in the
July Upper House election, Abe reshuffled his cabinet to recover
from the defeat but he failed. Did he lose his vitality and physical
vigor in the face of difficulties in steering his administration?

"I see.... Well, I have something important to talk to you," Abe
said calmly at his office in the Prime Minister's Official Residence
(Kantei) around noon yesterday, when the LDP's Diet Affairs
Committee Chairman Tadamori Oshima reported to Abe about a failure
to set a one-on-one meeting with DPJ President Ozawa to discuss the
question of extending the Maritime Self-Defense Force's (MSDF)
refueling mission.

Abe then said: "I have decided to step down. I will telephone the
secretary general now to tell him."

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Around 1:30 p.m., Abe called the five LDP top officers, including
Secretary General Aso, to the Kantei and again conveyed his

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intention to resign to them. Bowing before them, Abe said: "I am
sorry for troubling you at this important point in time. I apologize
for this."

Hidehisa Otsuji, chairman of the LDP Upper House Caucus, intensely
tried to persuade Abe not to resign, telling him, "This is not a
matter that involves only you. This is a matter of great importance
for the nation." But Abe would not change his mind and held an
emergency press conference at 2:00 p.m. Abe reiterated: "I must
change the current situation by taking responsibility as the top
leader."

After the press conference, Abe returned to his office and met with
his younger brother, Nobuo Kishi, a House of Councillors member. Abe
told Kishi: "In order for the refueling mission to be continued, it
would not be a wise choice for me to stay on." According to Kishi,
Abe looked deeply exhausted for a while after he returned home from
Sydney.

There were signs in Sydney that this might happen. In a meeting with
US President Bush on Sept. 8, Abe pledged to continue the refueling
mission, saying, "I'll do my utmost to accomplish it." Afterwards,
Abe told reporters: "This is an international pledge." At a press
conference with Japanese and foreign reporters on Sept. 9, Abe
further added, "I'll stake my position on it." Saying, "I will not
insist on holding on to my position," Abe implied his cabinet would
resign en masse if he failed to get the refueling mission extended.

The remark, "I'll stake my position on it," was taken to mean he had
expressed his "unflagging resolve" to continue the refueling

TOKYO 00004267 008 OF 015


mission, but some in the ruling bloc took it that "the prime
minister has now envisioned his own resignation."

According to Aso, on the evening of Sept. 10 after Abe delivered his
keynote address at the start of an extraordinary Diet session and
after an LDP executive meeting, Aso was told by Abe for the first
time about Abe's intention to "resign." Aso reportedly tried to
persuade Abe not to resign, saying, "Discussion on the antiterrorism
law has yet to start" and "Now is not the right timing (to
resign)."

9) Abe's health declines, isolated in Kantei

ASAHI (Page 2) (Full)
September 13, 2007

Because Prime Minister Abe's announcement of his intention to resign
came so abruptly, there are many who point out reasons other than
the question of continuing the Maritime Self-Defense Force's (MSDF)
refueling mission, which Abe referred to as the reason for his
resignation.

Chief Cabinet Secretary Yosano told a press briefing yesterday
evening: "I think problems the prime minister did not mention during
the press conference is his health."

It was out of common to mention in public a health problem, a matter
of life or death in political terms for politicians. But ahead of
his press briefing, Yosano was told by Abe, "You should speak the
truth." "The prime minister had come to this point in carefully
checking whether his health was strong enough to endure his tight
schedule and heavy, psychological pressure," Yosano said. Showing
consideration for the prime minister, Yosano continued: "The prime
minister was in deep agony in between his job and his health."

According to an official in the Prime Minister's Official Residence
(Kantei), Abe's health deteriorated during his tour of three
countries, including India, in mid-August. An official traveling
with Abe explained: "During the tour, the prime minister regularly
consulted a physician." This official continued that in Sydney, as
well, Abe was on an intravenous drip, adding that the prime minister
revealed to his aide, "My tours of India and Sydney were both hard
on me."

Recently physicians and nurses have been stationed in the Kantei. An
aide to the prime minister commented: "The prime minister somehow
survived his job by eating rice gruel and receiving an intravenous
drip, but I presume he became short on physical strength."

The former Abe cabinet was criticized as a "cabinet of friends." So
Abe reshuffled his cabinet at the end of August; as a result, former
Chief Cabinet Secretary Yasuhisa Shiozaki and former Advisor to the
Prime Minister Hiroshige Seko, both of whom are close to Abe, left
Kantei. An official in Kantei took this view: "The prime minister
appeared isolated in Kantei because he had no one in Kantei he could
consult with."

Additionally, because Aso and Yosano held the real power in steering
the Abe administration, Abe was "left out of the loop" in the case
of replacing the former Agriculture Minister Endo. Citing this, an
aide to the prime minister commented, "Abe perhaps became displeased
with the 'Yosano-Aso administration.'" Another Kantei official

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noted: "The prime minister was unable to handle even a small thing
as he wanted."

10) DPJ to step up offensive for early dissolution of Diet: Choosing
right time to hold Lower House election to come into focus of
attention

NIKKEI (Page 3 (Excerpts)
September 13, 2007

Prime Minister Abe's announcement of his decision to quit has
deepened the turmoil in the political world. Abe tried to find a
breakthrough in the issue of allowing the Maritime Self-Defense
Force's (MSDF) refueling operation in the Indian Ocean in exchange
for his own resignation. However, the Democratic Party of Japan
(DPJ) has firmly maintained its stance of opposing an extension. The
party is set to do its utmost in order to force a dissolution of the
Lower House at an early date, while eyeing the submission of a
censure motion against the prime minister in the Upper House.

DPJ President Ozawa during a press conference yesterday expressed
his determination to oppose the continuation of the MSDF refueling
mission, underscoring, "There is no change at all in our party's
policy of seeking a Lower House election at an early date." The
prime minister's surprise announcement of his decision to step down
has sent a shockwave to the DPJ as well. However, Ozawa declared
that there would be no change in his party's basic strategy.

Ozawa during a party executive meeting, held at a time when the
party was in turmoil, reproached participants, saying: "Calm down!
It's the other side that's in turmoil." He also stressed during a
meeting of the "Next Cabinet," "We will turn our pledges made to the
public during the Upper House election campaign into laws." He thus
confirmed the party's policy of submitting bills, including one to
ban on the use of pension premium funds from for purposes other than
use for pension benefit payments, to the Upper House.

His idea is that the DPJ should win over voters in order to take
over the reins of government in the next Lower House election by
making a public appeal that the DPJ is seriously tackling policies
for a better quality of life at a time when the Liberal Democratic
Party (LDP) is in turmoil over the selection of a successor to Abe.

Pursuit of government in three areas

The DPJ's strategy is to pursue the government in the Upper House
over its measures in three areas -- blocking the continuation of the
refueling mission, the pension issue, and the politics and money
issue. It envisages a scenario of seeking information disclosure, by
exercising administrative investigation rights, and forcing a
dissolution of the Lower House and a general election, by submitting
and adopting a censure motion against the prime minister, depending
on the government's response.

The government is expected to introduce in the current Diet session
a new bill allowing the MSDF to continue refueling operation as a
replacement for the current Antiterrorism Special Measures Law.
However, since the DPJ is determined to oppose the new bill, it is
bound to be voted down in the Upper House. If the ruling camp opts
for a second vote and passage in the Lower House, where it has
two-thirds of the seats, the DPJ would consider submitting a censure
motion, claiming that the ruling camp has ignored the will of the

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people.

Unlike a no-confidence motion against the cabinet submitted to the
Lower House, a censure motion in the Upper House has no legal power.
As such, even if it is adopted, it is not necessary for a new prime
minister to implement cabinet resignation en masse or to dissolve
the Lower House. However, since this would completely stop Diet
deliberations, the prevalent view is that the new prime minister
would be forced to choose one or the other.

It is unclear whether the government and the ruling parties will
really force through a second vote when there is such a possibility.
In the ruling camp, LDP members in the Upper House and the New
Komeito are negative toward the idea.

However, if the new bill were scrapped as a result of being voted
down in the Upper House, and the next prime minister remains unable
to decide to carry out a second vote, then his political
responsibility could be called into question. Should that occur, it
could deal a blow to Japan-US relations as well. Chances are high
that the next prime minister will find himself in a harsh situation,
regardless of whether or not he has opted for a second vote.

11) DPJ to review its strategy, following premiers' announcement to
step down: Perplexed that general election chance might slip away

MAINICHI (Page 2) (Excerpts)
September 13, 2007

Prime Minister Abe's announcement of his decision to resign has
spread bewilderment across the Democratic Party of Japan (DPJ or
Minshuto). The announcement came just at a time when the DPJ has
begun to put in every effort to pave the way for a dissolution of
the Lower House and a general election during the current session,
deeming it the most desirable scenario that the Diet be dissolved
under Prime Minister Abe, whose power base had markedly declined.
However, the view gaining ground in the party is that Diet
dissolution within the year has become remote because the prime
minister's resignation could turn around the current situation. The
DPJ will likely be pressed to review its strategy aimed at taking
the reins of government.

President Ichiro Ozawa during an executive meeting with Deputy
President Naoto Kan and Secretary General Yukio Hatoyama held at the
party headquarters yesterday evening ordered participants to quell
anxieties in the party, saying, "Don't get blindsided by the
political situation. We should remain calm." Ozawa has taken the
view right from the beginning that it would not be possible to force
a dissolution of the Lower House over a diplomatic issue like an
extension of the Antiterrorism Special Measures Law. However, in
response to the prime minister's statement that he would stake his
premiership on the issue, Ozawa ordered Diet Affairs Committee
Chairman Hirotaka Akamatsu to speed up preparations for an election,
saying, "Anything can happen now. Get on with it."

Ozawa during a press conference yesterday appeared calm when he
said, "It is only natural for any political party to take
appropriate measures, because the Diet could be dissolved at any
time." However, the DPJ's presence is bound to decline due to a
changeover of prime ministers. Hirohisa Fujii, supreme advisor and a
close aide to Ozawa, noted, "The DPJ will have to see a new prime
minister's stance. Diet dissolution will become remote and not take

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place within the year. The party will not submit a censure motion
against the prime minister in the Upper House."

Regarding the issue of extending the Antiterrorism Law, on which the
prime minister has staked the fate of his administration, the
prevalent view in the DPJ is that even if the law expires under a
new prime minister, it will cause not so much of a problem, as a
senior official of the Diet Affairs Committee put it. The party may
shift to a low-key strategy of accumulating issues through the
exercise of administrative investigation rights until Diet
deliberations on the budget bill in the regular Diet session next
year.

12) Prime minister's decision to resign likely to affect foreign and
security policies

NIKKEI (Page 2) (Full)

September 13, 2007

Prime Minister Abe's abrupt announcement of his resignation will
inevitably have an impact on the nation's foreign and security
policies. Uncertainty is looming larger over the fate of the
proposed new legislation to enable the Maritime Self-Defense Force
(MSDF) to continue its refueling mission in the Indian Ocean. Such
challenges as a review of the Constitution to allow the SDF to
exercise the right to collective defense are also likely to be put
on hold. The efforts to resolve North Korea's nuclear development
and abduction issues will unavoidably be put on hold.

Regarding the issue of an extension of the Antiterrorism Special
Measures Law, Foreign Minister Nobutaka Machimura told reporters
yesterday: "No matter who becomes the next prime minister,
discussion on the new legislation has already started in the ruling
camp." A new prime minister is likely to continue the current
policy, but the ruling camp has already had a major glitch in its
scenario for the MSDF refueling mission.

The government and the ruling parties were looking into a lengthy
extension of the current extraordinary Diet session until Nov. 10.
They had worked out a plan to enact the bill for a new law to
replace the Antiterrorism Law by the end of the year by having the
bill put to a vote in the House of Representatives and re-approved
there if the House of Councillors rejects the bill.

However, priority will be given to a policy speech by the new prime
minister and other events in September, so the start of discussing
the new legislation will inevitably be significantly delayed. It now
seems difficult to have the bill adopted in the Lower House by
mid-October as envisioned. A senior Foreign Ministry official said:
"It might become necessary to extend the session until early next
year" in order to enact the bill.

Some also voice concern about an adverse effect of the prime
minister's resignation on the six-party talks on North Korea's
nuclear programs. The next session of the six-party talks is
scheduled for later this month, and around that time, the new
government is expected to be launched. Keeping this in mind, a
senior government official grumbled: "North Korea might judge it
would be difficult for Japan to make a political decision."

13) Japan likely to call off refueling mission

TOKYO 00004267 012 OF 015

TOKYO (Page 2) (Abridged)
September 13, 2007

Prime Minister Shinzo Abe has now announced his resignation. The
ruling Liberal Democratic Party will therefore have to elect a new
president who will take the place of Abe as prime minister.
Meanwhile, the Diet will be also affected in its deliberations
scheduled ahead. As it stands, the Diet is expected to delay its
creation of a new law allowing Japan to continue the Maritime
Self-Defense Force's refueling activities in the Indian Ocean. It is
difficult to enact the newly planned law before the Antiterrorism
Special Measures Law's Nov. 1 expiry. Abe has internationally
committed himself to Japan's continued refueling activities in the
Indian Ocean. However, Japan will inevitably be driven to call off
its refueling mission.

The government and the ruling parties launched a project team on
Sept. 10 to discuss the issue of extending the antiterror law. The
project team has just begun its discussion, with former LDP Vice
President Taku Yamasaki presiding. The newly planned law restricts
the SDF's activities in the Indian Ocean to oil and water supply
services, and the legislation does not require the government to ask
the Diet for its approval. The government and the ruling coalition
are now creating a bill quickly to present it to the Diet late this
month.

However, Abe has now announced his intention to resign. In its
aftermath, the Diet will not meet until the LDP elects its new
president as Abe's successor. "We don't have enough time to
deliberate on the bill," says Gen Nakatani, former director general
of the Defense Agency, now upgraded to full ministry status.
Moreover, the leading opposition Democratic Party of Japan
(Minshuto), now the largest of all parties in the House of
Councillors, remains opposed to refueling itself.

"We won't change our mind even after the LDP installs a new
government," DPJ President Ichiro Ozawa told reporters in a press
conference held yesterday. With this, Ozawa stressed that there
would be no change in his party's stance of opposing the idea of
extending the MSDF's refueling mission in the Indian Ocean even
after Abe has stepped down.

14) Government, ruling camp looking to enact new antiterrorism
legislation early next year

SANKEI (Page 2) (Excerpts)
September 13, 2007

Prime Minister Shinzo Abe's resignation will significantly delay the
government's coordination work for new legislation to enable the
Maritime Self-Defense Force (MSDF) to continue a refueling mission
in the Indian Ocean. The MSDF mission is now highly likely to be
halted on Nov. 1, when the Antiterrorism Special Measures Law
expires. The government and the ruling camp have already started
discussing a lengthy extension of the current Diet session, which is
to end on Nov. 10, keeping in mind even the possibility of extending
it until early next year.

Chief Cabinet Secretary Kaoru Yosano, Foreign Minister Nobutaka
Machimura, and Defense Minister Masahiko Komura conferred on the new
legislation at the Prime Minister's Office yesterday. Speaking

TOKYO 00004267 013 OF 015


before reporters after the meeting, Machimura indicated that the
government would push ahead with work to draw up a bill without
waiting for a successor to Abe to assume office.

The government planned to adopt new legislation to replace the
Antiterrorism Law at a cabinet meeting on Sept. 21. The new bill
would limit the MSDF mission to oil and water supply. It also would
eliminate the stipulation in the Antiterrorism Law requiring Diet
approval for the MSDF mission.

With Prime Minister Abe's abrupt decision to resign, however, the
Diet will be closed until a new prime minister is elected, with
Liberal Democratic Party Diet Affairs Committee Chairman Tadamori
Oshima saying: "Diet deliberations cannot be carried out during the
LDP president election campaign."

The ruling bloc intended to begin deliberations on the new
legislation at a House of Representatives plenary session on Sept.
27, after the prime minister, who was scheduled to attend the United
Nations General Assembly in New York, returns home. But since the
Diet session will have to make a fresh start, beginning with a
policy speech by a new prime minister, the start of deliberations
will inevitably be moved to a later date.

The government envisioned the possibility of withdrawing the MSDF
temporarily when the Antiterrorism Law expires, but the unavoidable
delay in the enactment of the new bill will prolong the vacuum
period until the MSDF is again dispatched.

The ruling parties intends to enact the new legislation by making
use of the regulation allowing a bill to be brought back into the
House of Representatives for a revote with two-thirds approval if a
vote is not taken in the House of Councillors, where the opposition
holds a majority, 60 days after the bill is sent there from the
Lower House.

Nonetheless, a senior LDP official said: "As a result of the delay
in deliberations due to the prime minister's resignation, the revote
would be taken in the Lower House in late December or early next
year."

15) US interested in post-Abe election

YOMIURI (Page 2) (Full)
September 13, 2007

WASHINGTON-Prime Minister Abe has now expressed his intention to
step down. The US government believes that Abe's abrupt announcement
of his resignation may stagnate his initiative to strengthen Japan's
alliance with the United States through various steps, such as
backing up the war on terror. Washington is now tensely watching the
Japanese political situation's future course, including the process
of electing Abe's successor. In particular, the US government
anticipates that it would be inevitable to see a delay in the
process of enacting a legislative measure for Japan to continue the
Maritime Self-Defense Force's refueling activities in the Indian
Ocean. The United States, also assuming Japan's possible withdrawal,
will review its military operations including coordination with the
armed forces of other countries.

"Japan is an indispensable ally," White House spokesman Snow told
reporters at a press conference on the morning of Sept. 12 (on the

TOKYO 00004267 014 OF 015


evening of Sept. 12 Japan time). "We will continue to cooperate
closely in every possible area," he added. With this, the US
government reiterated its expectations for Japan to continue the
MSDF's refueling mission.

When President Bush, upholding the war on terror as his top priority
task, met Abe in Sydney on Sept. 8, the president requested Abe in
person to continue Japan's refueling activities. Japan's drawdown as
a US ally could further embolden the Democratic Party that is
intensifying its criticism of the Republican Party administration
over its Iraq policy. Moreover, Japan's supply of highly refined
fuel is indispensable for naval vessels out there from Pakistan and
other countries. Given this fact, they may also recall their
vessels. The US government hopes that Japan's new prime minister
will break the impasse. However, Washington is also at a loss over
Abe, who announced his resignation shortly after committing himself
to make his "utmost efforts" to continue Japan's refueling
activities.

Abe has focused on North Korea's abduction of Japanese nationals.
One US government official presumes that Abe's resignation would
make it easier for Washington to talk with Pyongyang through various
steps, such as removing North Korea from its terrorist list.

16) Concern growing about stagnation of economic policy, with Prime
Minister Abe's resignation

YOMIURI (Page 11) (Excerpts)
September 13, 2007

Prime Minister Abe's sudden announcement of his intent to step down
yesterday has dimmed the prospects for the fate of the key economic
challenges the administration has so far tackled. If the political
vacuum is prolonged, policy management may be stalled in the tax,
financial, trade and many other areas. Prime Minister Abe, who
continued the Koizumi administration's structural reform policy, has
decided to step down midway. Some persons have expressed concern
about the future of the reform policy line.

In a meeting of the Financial System Deliberation Council, an
advisory panel to the finance minister, which started at 2:00 pm
yesterday, the participants were watching Prime Minister Abe's press
conference on television for about 15 minutes at the outset.

In a press conference after the meeting, Council Chairman Taizo
Nishimuro, Tokyo Stock Exchange chairman, referred to the
compilation of the FY2008 budget and stressed his determination to
push through the financial reconstruction policy. He said: "I won't
make a policy switch while taking the shaky political situation into
consideration."

However, uncertainty is looming over the future Diet schedule.
Should the government, under attack from the opposition camp, decide
to dissolve the House of Representatives, the budgetary compilation
at year's end might be delayed to early next year.

On debate on a bold reform of the tax system, including the
consumption tax, as well, pessimistic views are spreading, as a
senior Finance Ministry official said: "The situation might become
such that lawmakers are so eager to discuss the Antiterrorism Law
that tax system reform might be set aside."


TOKYO 00004267 015 OF 015


SCHIEFFER

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