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Cablegate: Daily Summary of Japanese Press 09/14/07

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RUEHBJ/AMEMBASSY BEIJING 8982
RUEHUL/AMEMBASSY SEOUL 5040
RUCNDT/USMISSION USUN NEW YORK 5943

UNCLAS SECTION 01 OF 09 TOKYO 004317

SIPDIS

SIPDIS

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

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

SUBJECT: DAILY SUMMARY OF JAPANESE PRESS 09/14/07

Index:

(1) Fukuda nearly certain to become LDP president

(2) LDP race: Major factions form anti-Aso coalition

(3) Post-Abe diplomacy not in sight; Japan's N. Korea policy may
change

(4) Abe's resignation -- Japan's credibility at risk

(5) Collapse of Abe administration (Part 2): Prime minister's gospel
of "beautiful nation" gives no heed to voters' wishes

(6) LDP presidential race: Where will "Koizumi children" go?

(7) DPJ aggressively demanding disclosure of data by various
government agencies; Diet is stalled

ARTICLES:

(1) Fukuda nearly certain to become LDP president

YOMIURI (Top play) (Abridged)
Eve., September 14, 2007

The ruling Liberal Democratic Party announced a presidential
election today along with Prime Minister Shinzo Abe's announcement
of his resignation. The leaders of the Machimura, Niwa-Koga,
Yamasaki, Tanigaki, and Ibuki factions in the LDP clarified their
support for former Chief Cabinet Secretary Yasuo Fukuda, 71, who is
with the Machimura faction. In the Tsushima faction, Finance
Minister Fukushiro Nukaga, 63, who was eager to run in the race, has
given up on his candidacy. The Tsushima faction is going to back
Fukuda. Accordingly, Fukuda is expected to obtain support from more
than half of the LDP's lawmakers. Fukuda is essentially now certain
to become the LDP's new president. Meanwhile, LDP Secretary General
Taro Aso, 66, will meet the press this afternoon to announce his
candidacy for the race. Candidates are to file their candidacies
tomorrow. The LDP will elect its new president on Sept. 23.

(2) LDP race: Major factions form anti-Aso coalition

TOKYO (Page 3) (Abridged)
September 14, 2007

Former Chief Cabinet Secretary Yasuo Fukuda has now made up his mind
to run in the ruling Liberal Democratic Party's presidential
election. LDP Secretary General Taro Aso, who was ahead of all other
potential candidates, has now gotten into a scrape with the advent
of an influential candidate backed by big factions in the LDP. They
want Fukuda elected to the post of LDP president. How did they form
their coalition against Aso?

"In a way, I may be the least lucky of all," Fukuda told reporters
yesterday evening in the Diet, indicating that difficulties were in
store for him even if he becomes prime minister.

Prime Minister Shinzo Abe abruptly announced his resignation on
Sept. 12. After that, the "new YKK trio" of former LDP President
Taku Yamasaki, former LDP Secretary General Makoto Koga, and former
LDP Secretary General Koichi Kato was on the move. The three

TOKYO 00004317 002 OF 009


persuaded Fukuda to run for the LDP presidency. Former Finance
Minister Sadakazu Tanigaki was also a potential candidate eager to
run. However, Tanigaki, according to one close to him, has given up
on his candidacy this time if Fukuda runs.

The three factions of Koga, Tanigaki, and Aso stem from the former
Miyazawa faction, which had a strong imprint of liberalism. The Koga
and Tanigaki factions have distanced themselves from Abe, who is
conservative. The two factions were strongly repulsed by the way Aso
sought to take power while standing behind Abe.

The Yamasaki faction, which is critical of Abe, joined the Koga and
Tanigaki factions to form a coalition against Aso. "He has joint
responsibility for Prime Minister Abe's sudden resignation." With
this, one LDP veteran lawmaker criticized Aso. Such criticism is
spreading in the LDP. The anti-Aso coalition has now expanded beyond
the new YKK trio's framework.

Fukuda, now backed by the anti-Aso factions, proved himself to be a
steady hand as chief cabinet secretary when Prime Minister Koizumi
was in office. Fukuda got high marks for his stable political
ability, and he is also well known. His political stance is also
regarded as liberal. At the time of the LDP race in the fall of last
year as well, the new YKK trio moved to run Fukuda against Abe.
Fukuda answered the call the new YKK trio had been making over the
past two years.

On Sept. 12, the new YKK trio asked Fukuda to run. At that time,
Fukuda withheld his answer, telling them that he would "carefully
consider" his entry into the race.

Fukuda is with the Machimura faction, which has produced three prime
ministers in succession, namely, Yoshiro Mori, Junichiro Koizumi,
and Shinzo Abe. If Fukuda becomes the fourth one in a row, that is
an extremely rare case.

Furthermore, Abe's abrupt announcement of his resignation has thrown
the LDP into confusion. "The Machimura faction should not say the
next one is Fukuda," one of the Machimura faction's leaders said. In
addition to Fukuda, the Machimura faction has Foreign Minister
Nobutaka Machimura, who was a candidate for the race. Fukuda had to
clear this problem before his entry into the race, or he could not
expect to win.

Fukuda met with Mori and Machimura yesterday afternoon. He also kept
in touch with other factions. "The Machimura faction will not put
him up," one of the Machimura faction's leaders said. "Instead,"
this leader added, "he will run in the form of being recommended by
other factions." Fukuda then made up his mind.

(3) Post-Abe diplomacy not in sight; Japan's N. Korea policy may
change

ASAHI (Page 8) (Full)
September 13, 2007

Will Japan continue to back up the United States in its war on
terror? How will Japan deal with the pending issue of Japanese
nationals abducted to North Korea? What is in store for the
six-party talks over North Korea's nuclear programs? What will come
out of Japan-China relations in their "thawing" phase? What about
Japan's "assertive" diplomacy? Will Japan inherit or alter Prime

TOKYO 00004317 003 OF 009


Minister Abe's ideals-first diplomacy? In the aftermath of the prime
minister's abrupt announcement of his resignation, Japan's foreign
policy is also becoming increasingly uncertain.

Prime Minister Abe has upheld his diplomacy with emphasis on values,
aiming to strengthen Japan's relations with countries that share
values like freedom and democracy. Taro Aso, secretary general of
the ruling Liberal Democratic Party, shored up Abe and his
government while he was in the cabinet as Abe's foreign minister.
Abe's values-oriented diplomacy also has something in common with
Aso's diplomatic concept of an "arc of freedom and prosperity." In
particular, Japan has now cited a bilateral joint declaration on
security with Australia, following the first one with the United
States. Japan has now expanded the scope of its bilateral alliance
with the United States to a de facto tripartite alliance involving
Australia.

However, the Bush administration's plan to democratize the Middle
East has now hit snags. Under such circumstances, Abe's diplomatic
stance with ideals going first could unnecessarily antagonize
Japan's neighbors. One of them is China, a big power rapidly growing
in the region. Then, how will the next prime minister position Japan
in its relations with China?

Japan is deeply tied to the United States in political, economic,
security, and various other areas. Abe's resignation would therefore
not undermine the two countries' bilateral relationship at once.
Even so, it is now difficult for Japan to continue the Maritime
Self-Defense Force's refueling activities in the Indian Ocean under
the Antiterrorism Special Measures Law (beyond its Nov. 1 expiry).
As it stands, there is no knowing if Japan's next prime minister can
build a honeymoon relationship like the Koizumi-Bush relationship.
"The focus is on whether the next prime minister can continue the
MSDF's mission," says a senior official of the Foreign Ministry.

In addition, a US presidential election is also scheduled ahead. In
its campaigning for the next presidency, the Democratic Party is
seeking to expand the United States' engagement with China. What if
the Democratic Party comes into office? "If that is the case," one
of the Foreign Ministry's senior officials says, "the United States
may shift the axis of its Asia diplomacy from Japan to China."

Japan and the United States may be wavering in their relations. This
will also likely leave subtle repercussions on the two countries'
respective policies toward North Korea. The US government is
considering removing North Korea from its terrorist list and
formally ending the Korean War if North Korea abandons its nuclear
programs and disables its nuclear facilities.

Tokyo has told Washington that the US government should not delist
North Korea as long as there is no progress on the abduction issue.
However, the United States and North Korea are now moving at a high
pitch for rapprochement through direct dialogue. Then, the question
is if Japan's next prime minister can maintain Abe's hardline stance
toward Pyongyang. Some note that Japan alone may be left behind
other six-party members over their relations with North Korea. The
post-Abe leader therefore could switch Abe's diplomatic stance.

Abe, shortly after coming into office, visited China and South
Korea. His visits to the two neighbors helped improve Japan's
bilateral relations with the two countries. For the time being,
Japan's bilateral relations with these two countries are not

TOKYO 00004317 004 OF 009


expected to undergo a sea change. This year marks the 35th
anniversary of diplomatic normalization between Japan and China,
with both countries in a mood to welcome it. Abe's predecessor,
former Prime Minister Koizumi, was particular about paying homage at
Yasukuni Shrine. While Koizumi was in office, there were no mutual
visits of leaders between Japan and China. With Abe coming into
office, the two countries resumed high-level mutual visits. Chinese
Prime Minister Wen Jiabao visited Japan in April, and Chinese
Defense Minister Cao Gangchuan in August. Chinese President Hu
Jintao is scheduled to visit Japan next year. Ahead of his visit,
how to get Japan-China relations on track will be a challenge for
the next prime minister.

Japan-China relations are thawing, with Abe having abstained from
visiting Yasukuni Shrine and China having shelved issues related to
history. However, Tokyo and Beijing have yet to resolve pending
issues, such as what to do about developing oil fields together in
the East China Sea.

(4) Abe's resignation -- Japan's credibility at risk

NIKKEI (Page 1) (Abridged slightly)
September 14, 2007

By Naoaki Okabe, Nikkei editor-in-chief

Prime Minister Shinzo Abe's abrupt announcement to step down caused
not only chaos in the Liberal Democratic Party that has carried out
irresponsible and childish politics but also rocked the entire
nation. Public confidence in politics is now at stake. If the
government fails to climb out of this political turmoil and a long
policy vacuum results, Japan's political risk might eventually set
off an international storm. The task of ending the political crisis
will weigh heavily on the next administration.

People might call it 9/12. An embattled Abe announced his intention
to resign on September 12, the day after the international community
renewed its resolve to fight against terrorism on the sixth
anniversary of 9/11.

The next administration will have to tackle the laborious homework
Abe refused to finish. The refueling mission in the Indian Ocean is
an important role Japan can play in the war on terrorism. Extending
the Antiterrorism Special Measures Law is essential for maintaining
the Japan-US alliance and working closely with the rest of the
world.

In contrast to the Iraq war that is strongly tinged with President
Bush's unilateralism, the war in Afghanistan is an international
effort involving such countries as Germany, France, and Pakistan
that opposed the Iraq war. The government's decision to discontinue
the refueling mission and leave the war on terrorism would harm
Japan's international position, effectively bringing back the
country to the days before the Gulf War, in which Japan was
criticized for its "checkbook diplomacy."

The war on terrorism is not the only pressing issue. Although the
economy is recovering, the Japanese economy is saddled with many
structural problems. For instance, the country has the fiscal
deficit that is the highest among developed countries, and its
birthrate is dropping while the population is graying rapidly.


TOKYO 00004317 005 OF 009


Japan is in more need of pension, tax, and fiscal reforms combined
with growth strategy than ever before. Comprehensive tax reform,
including hiking the consumption and corporate taxes, was supposed
to be set in motion this fall. The political turmoil will deepen the
structural problems.

An administration rolling back reforms is the last thing the country
needs. The lavish distribution of subsidies in the name of
redressing socioeconomic disparities would weaken the country. The
Abe administration has failed because its reform efforts were
half-baked. The next administration is tasked with advancing reforms
in an age of global competition.

The global financial and capital markets have not been functioning
properly due to the US subprime loan crisis. A setback from the
reform policy course and other factors augmenting the political risk
would push foreign investors toward Japan-selling, thereby throwing
the markets deeper into confusion.

Global environmental issues will test Japan's leadership. Toward the
2008 Lake Toya Summit, intensive environmental diplomacy is expected
to unfold over creating an international framework replacing the
Kyoto Protocol. Prime Minister Abe's proposal served as the
foundation for the Heiligendamm Summit agreement to halve greenhouse
gas emissions by 2050. Abe jumped into the international spotlight
because of that proposal. Japan, however, might not be able to meet
its reduction targets specified in the Kyoto Protocol.

Japan is playing a leading role in the international effort to
create a post-Kyoto framework. Japan's failure to fulfill its
responsibility due to political chaos would further undermine its
international credibility.

A firm political foundation is essential in addressing those tough
issues. The best way to end the political turmoil is to dissolve the
Lower House for a snap general election to establish a stable
political foundation based on popular will. The process would raise
some questions for the Democratic Party of Japan as a responsible
political party. Those questions would include: How will Japan
contribute to the international community in the war on terrorism?
Is it possible to reform the pension system without raising the
consumption tax? Does an income security system for individual
farmers not go against agricultural reform?

If an LDP-DPJ two-party system is to be realized, the nation could
very well witness political realignment based on reform policies.
Forming a grand coalition would be an option for achieving policy
goals, such as pension and tax reforms.

German Chancellor Angela Merkel's grand coalition has restored the
country's economic health by hiking the value-added tax and lowering
the corporate tax. She is also spearheading the international effort
to prevent global warming.

Germany's grand coalition succeeded because all parties shared a
sense of crisis over the future of the country. Learning a lesson
from Germany, Japanese political parties should also share a sense
of crisis at this critical juncture.

(5) Collapse of Abe administration (Part 2): Prime minister's gospel
of "beautiful nation" gives no heed to voters' wishes


TOKYO 00004317 006 OF 009


TOKYO SHIMBUN (Page 1) (Full)
September 14, 2007

In the morning yesterday, the day after Prime Minister Abe's
astounding announcement of his resignation, Abe left his official
residence for a hospital in Tokyo by a public vehicle and was
hospitalized there. He did not attend a joint meeting of the Liberal
Democratic Party's members of both houses in the afternoon.

Prime Minister Abe has lost his political clout since his
announcement of resignation. With his hospitalization due to poor
physical condition, Abe also has literally disappeared from
Nagata-cho (Japan's political center), where there is a lot of
activity going on over the selection of a new prime minister.

One year ago, Abe announced his candidacy for the LDP presidential
election with great fanfare. He released a manifesto titled, "A
beautiful nation, Japan," drawing both positive and negative
evaluations over the past year. Abe came under the spotlight as the
prince of the political world. Photographs of smiling Abe made the
covers of magazines.

The Abe administration brought forth in the manifesto the slogan of
emerging from the postwar regime as one of the main pillars to build
a beautiful nation.

The agenda of freeing Japan from the postwar regime is aimed at
revising the Constitution. On the Constitution, the prime minister
noted in a book he authored: "In the preamble, there is a
declaration that could be taken as a deed of apology offered by a
defeated country." This agenda was also to lift a ban on Japan's use
of the right to collective self-defense.

In the first extraordinary Diet session held after Abe came into
office, the government revised the Fundamental Law of Education as
strongly desired by the LDP. In the earlier regular Diet session,
the government also enacted the National Referendum Law, which sets
legal procedures for revision of the Constitution. In addition, the
Abe administration started discussion to partially allow the use of
the right to collective self-defense.

In the July House of Councillors election, although pension problems
were the top campaign issue, the prime minister sought a judgment by
the voters for his slogan of freeing Japan from the postwar regime.

Just before the official announcement of the election, the prime
minister had said: "I want to pin all my hopes on the achievements I
have made (since assuming office)."

The voters, however, took no notice of the achievements. After all,
the prime minister tried his hand at the agenda of emerging from the
postwar regime, against the backdrop of the "legacy" of more than
300 seats in the House of Representatives left by former Prime
Minister Junichiro Koizumi, but he failed to win public trust in his
policy.

In the policy speech on Sept. 10, which turned out to be his last
declaration of his determination to stay in power, the prime
minister repeated his stock argument: "To secure a high quality life
and a bright future, it is absolutely necessary to free Japan from
the postwar regime."


TOKYO 00004317 007 OF 009


These words of the prime minister make us feel rather awkward. Why
is the slogan of emerging from the postwar regime necessary in order
to realize an affluent national life? This is nothing but a leap of
logic.

In summing up the Upper House election campaign, the LDP pointed out
a gap in the order of policy priorities between the LDP and the
voters. The voters wanted politicians to promise in the election
campaign to step up efforts to resolve such issues as pension,
employment, and social disparities, in order to bring about an
affluent national life. The prime minister's postwar-regime slogan
gave no heed to the wishes of the voters to the last.

(6) LDP presidential race: Where will "Koizumi children" go?

YOMIURI (Page 2) (Full)
September 14, 2007

Every one of a group of Lower House members, including Jiro Ono,
calling for former Prime Minister Junichiro Koizumi to run in the
upcoming presidential election of the Liberal Democratic Party
(LDP), was entering with a concerned air into the office on the
fifth floor of the LDP's headquarters soon after 9:00 a.m.
yesterday.

Yasuhiro Nakagawa enthusiastically said:

"We are now serving in the Lower House because former Prime Minister
Koizumi promoted reforms. There is no other person than Koizumi who
can push ahead with the reforms."

Ono member echoed: "I believe that former Prime Minister is the only
person who will be able to win the coming election."

Both Ono and Nakagawa are the so-called "Koizumi children," who were
elected for the first time to the Diet in the 2005 Lower House
election.

Ono and Yasufumi Tanahashi, former science and technology agency
chief, who is now serving in his fourth term in the Lower House, got
together at Grand Prince Hotel Akasaka late at night of Sept. 12
when Prime Minister Shinzo Abe announced his intention to step down.
They then decided to form the group. On the evening that day, 31
lawmakers signed a letter asking Koizumi to run in the race.

In the background is a sense of crisis of freshman lawmakers, as
there is no prospect as to whether they will be able to survive the
next Lower House election. They are upset about the fact that Takeo
Hiranuma, who bolted the LDP in opposition to the government's
postal-privatization plan, called for favorable treatment of "postal
rebels," who were defeated in the 2005 election.

However, the Koizumi children are not necessarily united. At 11:00
a.m. yesterday, the 83 (hachisan) Association composed of 83 Koizumi
children wrapped up a meeting after 10 minutes.

Chairman Masatada Tsuchiya proposed submitting a petition calling on
the party leadership to hold an open presidential election. The
members' views were divided. One member said reluctantly: "More than
half of the 83 members belong to a faction."

"There is no possibility that I will run in the election," Koizumi

TOKYO 00004317 008 OF 009


told former Prime Minister Mori on the phone yesterday. Tanahashi
and his follows assembled last night at Toranomon Pastoral in Tokyo
to discuss the second best option. One member said: "Secretary
General Aso, who intends to allow Hiranuma to return to the party,
is not our choice." Another member remarked: "In order to avoid our
votes from becoming null, Tanahashi should run."

The number of signatures collected was 36. The group will support a
candidate who will follow the Koizumi reform drive, having the
option of fielding its own candidate. After the meeting, Tanahashi
repeatedly used the word "unity" in a press briefing.

(7) DPJ aggressively demanding disclosure of data by various
government agencies; Diet is stalled

ASAHI (Page 4) (Full)
September 14, 2007

At a time when the extraordinary Diet session is stalled, following
Prime Minister Abe's announcement of his plan to step down, the
Democratic Party of Japan (DPJ or Minshuto) is successively asking
various government agencies to disclose data concerning such issues
as the continuation of the Maritime Self-Defense Force's mission in
the Indian Ocean and the wasteful spending of pension funds and tax
money. It is now preparing to quiz the ruling camp in Diet debate
when it is resumed. The aim is to take advantage of the current
situation, where the ruling and opposition camps have traded places
in the Upper House and, therefore, it can exercise administrative
investigation rights. Another aim is to highlight differences from
the Liberal Democratic Party (LDP), while it is preoccupied with its
presidential election.

Preparation for resumption of Diet debate

Defense Operations Bureau Director General Nobushige Takamizawa
during a meeting of the DPJ's Foreign and Defense Division held in
the Diet on the morning of Sept. 13 offered a reply in response to
the request to disclose data made by the party the previous day,
"Refueling operations for vessels of the US and other countries are
being carried out in a fair and appropriate manner. It is not
possible to reveal the details of contracts for operational
reasons." Some 40 DPJ participants jeered Takamizawa, calling on him
to explain what a fair and appropriate manner is.

Next Cabinet Foreign Minister Yoshio Hachiro requested that the
Defense Ministry deal with the Diet session with the perception that
the situation has changed after the Upper House election. In the
end, he called for the Foreign Ministry and the Defense Ministry to
provide a reply again, claiming that their answers were
insufficient.

The DPJ has the initiative in deliberations on budgets and bills in
the Upper House, where it has become the top party. On that
strength, it is asking government agencies to disclose various data.
Their aim is to quickly obtain data and use them for the pursuit of
the government in Diet debate and for drafting bills.

Next Cabinet Pension Minister Akira Nagatsuma on Sept. 12 made a
sidewalk speech, noting, "A political vacuum will occur due to the
LDP's presidential election. The DPJ in the meantime will hold
division meetings and submit data to the government."


TOKYO 00004317 009 OF 009


However, government agencies are not complying with the DPJ's
requests so easily. Regarding the allegation that the MSDF during an
operation in the Indian Ocean refueled US vessels heading for Iraq,
violating the objective of the Antiterrorism Special Measures Law, a
participant from the Defense Agency during a meeting of the Foreign
and Defense Affairs Division offered no more explanation that that
the ministry has already provided, saying, "The US said there were
no such cases."

The DPJ intends to roundly demand the disclosure of requested data
from the government agencies that have failed to provide sufficient
replies at the Budget Committee of both chambers. If they fail to
respond to its request appropriately, it is determined to consider
taking steps, including exercising administrative investigation
rights by majority vote in the Upper House, according to Tetsuro
Fukuyama, chairman of the DPJ's Upper House Policy Board.

Azuma Koshiishi, chairman of the DPJ caucus in the Upper House, at a
press conference on Sept. 13 noted that the stalled Diet caused by
the LDP presidential election has given an opportunity for the DPJ
to fully prepare for coming Diet deliberations. He thus stressed his
party's stance of waging a contest fairly and squarely instead of
availing itself of the political crisis.

SCHIEFFER

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