Cablegate: Japanese Morning Press Highlights 10/26/07

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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 10/26/07

Index:

North Korea problem:
1) In unusual move, US Embassy invites association of families of
Japanese abducted by North Korea for meeting on abductions, US-DPRK
issues (Mainichi)
2) US Ambassador to Japan Schieffer's personal letter to President
Bush on North Korea issues leaked to Fox News (Sankei)
3) Japan transmits to North Korea new policy approach of willingness
to provide assistance in stages based on progress on abductions,
nuclear issue (Nikkei)
4) Foreign Minister Komura sees "progress" in North Korea abduction
issue as return of more abductees (Asahi)
5) MOFA delegate to six-party talks Sasae stresses need to verify
DPRK's denuclearization steps before taking name off list of states
sponsoring terrorism (Asahi)

6) Foreign Minister Komura worried about new frictions with US once
Japan halts MSDF refueling operations in Indian Ocean (Yomiuri)

7) Chief Cabinet Secretary Machimura will preside over meeting of
Futenma council (Yomiuri)

Defense Ministry scandal:
8) Former Defense Minister Kyuma also wined and dined by
scandal-ridden defense contractor last December (Tokyo Shimbun)
9) Yamada Yoko Corp. not punished for exorbitant billing of Defense
Agency 6 years ago when former Vice Defense Minister Moriya was in
charge (Asahi)

Political developments:
10) Mainichi poll finds 44 PERCENT of public wanting the Democratic
Party of Japan (DPJ) to win in the next Lower House election, five
points higher than LDP (Mainichi)
11) Prime Minister Fukuda, DPJ President Ozawa square off in the
Diet on Oct. 31 for a one-on-one debate (Sankei)
12) LDP, Komeito seriously alarmed about possibility rising of a
"second tainted-blood" medical scandal involving the Health Ministry
(Tokyo Shimbun)

Articles:

1) US embassy holds unusual meeting with abductees' families

MAINICHI (Page 1) (Full)
October 26, 2007

US Embassy First Secretary Keith Jordan met yesterday with
representatives of the families of the missing abductees and the
National Association for the Rescue of Japanese Kidnapped by North
Korea, a support organization. In the meeting, Jordan told them that
the abduction issue is a matter between Japan and North Korea. The
representatives are scheduled to meet this evening with Prime
Minister Yasuo Fukuda. Jordan invited them to hear before they met
the prime minister what their requests to the Japanese government
would be. The representatives mentioned conditions for delisting the
North as a state sponsor of terrorism. It is unusual for the US
Embassy to request a meeting with the families of the missing
abductees.

In yesterday's meeting, Jordan asked them what they considered as
"progress" on the abduction issue, which is regarded as one of the

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conditions to delist the North as a state sponsor of terrorism, and
he urged them to provide him with a paper detailing their view so
that he would be able to relay it to Washington.

The representatives of the families of the missing abductees
expressed their concern about Jordan's remarks. They took the
remarks to mean that the US side had revealed for the first time
that the delisting and the abductions are two separate issues.

Meeting with the embassy officer were five family members, including
Shigeru Yokota, 74, the representative of the association of the
families of the missing abductees. Although Yokota and other members
questioned what was specifically meant by nuclear disablement, one
of the conditions for delisting North Korea as a state sponsor of
terrorism, Jordan did not give a clear answer.

When asked by a representative from the families of the missing
abductees whether the delisting and abduction issue were separate
issues, Jordan reportedly responded that the abduction cases are a
bilateral issue, so Japan should discuss it from that viewpoint.

Asked by Jordan about what they considered progress on the abduction
issue, the abductee family side replied that the six-party talks
should begin deliberations on the condition that North Korean leader
Kim Jong Il would acknowledge the abduction issue (although he has
said that the issue has been resolved), and that all abductees would
be repatriated.

Foreign Minister Masahiko Komura stated yesterday in a House of
Councillors Committee on Foreign Affairs and Defense session: "Even
if several abductees are repatriated, the abduction issue will not
be resolved. However, such would seem to be progress on the issue."

2) US ambassador to Japan raises a red flag about delisting North
Korea as state sponsor of terrorism, giving direct advice to the
president regarding conciliatory policy toward the North; Creates
stir in US

SANKEI (Page 1) (Full)
October 26, 2007

Takashi Arimoto, Washington

Views within the US government have now become split over the
question of delisting North Korea as a state sponsor of terrorism.
The reason is because US Ambassador to Japan Thomas Schieffer sent
an official telegram on Oct. 24 to President George W. Bush in which
he urged the president not to delist North Korea and expressed his
dissatisfaction with the stance of Assistant Secretary of State (for
East Asian and Pacific Affairs) Christopher Hill, who is responsible
for talks with North Korea. There was an observation that the Bush
administration might delist North Korea possibly by the end of the
year. But the "direct advice" of the ambassador, who is reportedly
most close to the president, might result in a change in the US
conciliatory trend toward North Korea.

According to Fox TV, the ambassador has a strong interest in the
abduction issue, as seen in his having visited the site from where
Megumi Yokota, then 13, was abducted by North Korean agents. The
ambassador seems to have expressed concern over the situation where
the delisting is regarded as a done deal in the US government,
despite the Japanese government's request.

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There also seems to be frustration that he has not been kept
informed properly as ambassador to Japan. In the cable, Schieffer
reportedly expressed a sense of distrust, stating that although he
asked Assistant Secretary Hill if he had promised delisting, he
received no response.

About the report, National Security Council (NSC) spokesman Gordon
Johndroe commented to the Sankei Shimbun, "The president highly
evaluates the ambassador's job performance." The ambassador, too,
replied: "I have been in close contact with the president, and I
have nothing to talk about it."

Meanwhile, Secretary of State Condoleezza Rice basically supports
Hill, although she has declared, "We have no intention of advancing
relations with North Korea at the expense of US-Japan relations."

The US Congressional Research Service produced on Oct. 25 a report
on North Korea concluding that the Bush administration, which
previously maintained it would not comply with a request for
normalizing relations with the DPRK unless there was progress on the
human rights issue and other matters, now has defined the human
rights issue and other matters as "issues to be settled after the
nuclear issue." The change came after the six-party agreement in
February on the North Korean nuclear issue. The report also singles
out Assistant Secretary Hill as having taken such a posture.

Mansfield Foundation Executive Director Gordon Flake, who is well
versed in North Korean affairs, sounded an alarm that if North Korea
were delisted, it would harm US-Japan relations.

Flake indicated that in the event North Korea's suspected nuclear
cooperation with Syria was taken seriously by Congress, there is a
possibility that the US government will not delist North Korea. He
also said that in the wake of the emergence of the nuclear
proliferation issue, people around Vice President Cheney are
becoming cautious about expediting talks with North Korea.

Flake thinks matters ultimately will depend on President Bush's
decision. There seems to be a possibility that the president's
response will be affected by the view of Ambassador Schieffer, who
according to a US diplomatic source is so close to the president
that he can directly place a call to his bedroom, the both having
grown up in Texas and having jointly run a Major League baseball
club.

Flake also pointed out the need for Japan to present an alternative
strategy at the Japan-US summit in mid-November instead of just
opposing the delisting.

3) Government to take new approach to break impasse in relations
with North Korea

NIKKEI (Top Play) (Excerpts)
October 26, 2007

The government has decided to take a new approach to break the
impasse in its relations with North Korea. While clarifying that
Japan gives top priority to bringing abductee victims back to Japan,
it will consider phasing out sanctions and providing aid in
proportion to the level of progress on the abduction, nuclear, and
missile issues. Setting the normalization of bilateral diplomatic

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ties, including the settlement of past accounts, as its final goal,
the government will also look into establishing a framework for both
sides to discuss steps they should take and implement them. It aims
to make arrangements for Pyongyang to find it easy to take a step
forward to resolve the issue of Japanese nationals abducted by North
Korea and urge it to compromise.

The new policy reflects the stance of Prime Minister Yasuo Fukuda,
who stresses the importance of promoting dialogue and pushing ahead
with the six-party talks aimed at denuclearizing North Korea. The
government has already informed Pyongyang of the basic outline of
the new policy. The policy is likely to be discussed at a bilateral
working-level meeting expected to take place in early November. Even
so, it is uncertain what response Pyongyang will make. North Korean
leader Kim Jong Il persists: "There are no other survivors than the
five (who returned to Japan in 2002)."

The government has so far called on North Korea to return the
abductees, uncover details, and punish or hand over those involved
in the abductions. While maintaining this principle, Japan will
designate the swift return of all surviving abductees as the top
priority, based on the prim minister's strong position that the
abduction issue cannot be left unresolved.

The government now judges that if Japan overly focuses on
identifying those responsible and demanding an explanation of past
conflicting statements, their return could be delayed. If North
Korea continues to claim that all other abductees died, Japan will
urge it to present evidence supporting the claim.

Japan has set progress on the abduction issue as the condition for
ending sanctions and providing aid. This condition will be kept in
place. But the government will consider the possibility of
indicating beforehand the steps it will take if Pyongyang shows a
sincere attitude toward returning surviving abductees or resolving
the missile problem. The "action-to-action" principle being adopted
in the six-party talks will also be used in Japan-North Korea talks.
In short, the government plans to prepare a roadmap for Japan-North
Korea talks.

In a meeting of the House of Councillors foreign and defense affairs
committees yesterday, Foreign Minister Masahiko Komura said: "We
cannot say it is a solution to the issue even if some of the
abductees return to Japan, but it may be seen as progress."

The government keeps in mind (1) humanitarian aid to North Korea;
(2) easing or lifting such economic sanctions as the ban on North
Korean ships from entering Japanese ports and the embargo on all
imports; and (3) energy aid in exchange for North Korea's disabling
nuclear facilities. Japan will also maintain the principle of
offering full-scale economic cooperation after bilateral diplomatic
relations are normalized.

4) Foreign Minister Komura: If several abductees repatriated, we
will regard that as progress in abduction issue

ASAHI (Page 4) (Full)
October 26, 2007

Foreign Minister Masahiko Komura stated yesterday in a House of
Councillors Foreign Affairs and Defense Committee session: "Even if
several (abductees) are repatriated, the abduction issue will not be

TOKYO 00005003 005 OF 009

resolved. But such would seem to be an improvement in the issue." He
indicated that the Japanese government would take it as progress in
the abduction issue if some abductees were repatriated. He was
answering a question by Shinkun Haku of the main opposition
Democratic Party of Japan (DPJ or Minshuto).

Asked about Komura's remarks by reporters, Chief Cabinet Secretary
Nobutaka Machimura responded yesterday:

"Since I don't understand the meaning of several -- whether it means
some of the several dozen abductees or all the abductees, it is
difficult to tell right now whether his statement was the
government's policy."

The government has refrained from mentioning specifics on
improvement in the abduction issue. Kyoko Nakayama, special advisor
to the prime minister on the abduction issue, said in an interview
to the Asahi Shimbun last month that the repatriation of several
abductees would not mean progress.

5) Foreign Ministry's Sasae stresses need for verifying
denuclearization before delisting North Korea as state sponsor of
terrorism

ASAHI (Page 4) (Full)
October 26, 2007

Takashi Horiuchi, Washington

The Foreign Ministry's Asian and Oceanian Affairs Bureau Director
General Kenichiro Sasae, now visiting the United States, met on Oct.
24 in Washington with White House National Security Council Senior
Director for East Asian Affairs Dennis Wilder. According to those
involved, Sasae said, "It is important to implement denuclearization
and ensure progress on Japan-North Korea relations" in order to
delist the North as a state sponsor of terrorism. He underscored
that the strict verification of the process of denuclearization
would be necessary, in addition to the abduction issue.

The purpose of Sasae's assertion is to urge the US to delay removing
North Korea from its list of state sponsors of terrorism. A senior
Foreign Ministry official said: "The problem is what will be
included in North Korea's declaration." He noted that whether the
North includes uranium enrichment and nuclear programs, which are
not specified in the six-party agreement, will become a material to
determine whether that country will implement its agreement.

6) Foreign minister sees "new friction between Japan and the US" due
to mountain of pending issues

YOMIURI (Page 4) (Full)
October 26, 2007

Referring to Japan-US relations, Foreign Minister Komura during a
meeting of the Upper House Diplomatic and Defense Affairs Committee
yesterday noted, "New frictions seem to be developing. If, for
instance, refueling operations in the Indian Ocean by the Maritime
Self-Defense Force came to a halt and the new antiterrorism special
measures bill fails to secure Diet passage, the US side would
probably think, 'What is Japan doing as our ally? It is not even
contributing to the international community.'"

TOKYO 00005003 006 OF 009

He expressed concern in his remark about the possibility of
bilateral relations becoming strained due to a number of pending
issues, such as the refueling operations, the realignment of US
forces in Japan, and planned cuts in Japan's host nation support for
US forces stationed in Japan.

Komura made that comment in response to a question asked by Ichita
Yamamoto of the Liberal Democratic Party (LDP).

7) Chief cabinet secretary to preside over consultative council on
Futenma issue

YOMIURI (Page 4) (Full)
October 26, 2007

The government yesterday decided that the chief cabinet secretary
will chair a consultative council between Okinawa Prefecture and
related municipalities on the issue of relocating the US Marine
Corp's Futenma Air Station to the coastal part of Camp Schwab. The
defense minister and the state minister for Okinawa have thus far
presided over the council, established in August last year. The
appointment of the chief cabinet secretary means de facto upgrading
of the panel. The aim is to enable the Prime Minister's Official
Residence (Kantei) to take the lead in hard-going coordination of
views with local governments.

The government is now undertaking coordination with the possibility
of holding the panel's fourth meeting in early November before Prime
Minister Fukuda. The panel last held a meeting in January this
year.

8) Former Yamada Corp. executive director treated former Defense
Minister Kyuma to inaugural dinner last December

TOKYO SHIMBUN (Top Play) (Full)
October 26, 2007

It was learned from an informed source that former Defense Minister
Akio Kyuma was entertained by a former executive director (69) of
Yamada Yoko Corp. in Minato Ward, Tokyo, a trading house
specializing in defense procurement, at a traditional Japanese
restaurant in Akasaka, Tokyo. The source said that the former
managing director paid the bill. Concerning Yamada Corp., it was
already found that this former executive director treated former
Administrative Vice Defense Minister Takemasa Moriya (63) with free
rounds of golf more than 200 times. The revelation proves that the
collusive ties between Yamada Corp. and senior officials of then
Defense Agency involved the two top officials.

According to the same source, the executive invited Kyuma to a
famous Japanese restaurant known for turtle dishes in early December
last year. Several others were also present.

This former executive director, established Nihon Mirise, a trading
company specializing in the defense area, in Minato Ward, Tokyo, in
September last year, after quitting Yamada Corp. in June the same
year. He reportedly planned the dinner to celebrate Kyuma's
assumption of the post of defense minister.

The executive reportedly explained to Kyuma details on how he came
to establish Nihon Mirise. He paid the bill for the dinner, which
cost more than 100,000 yen.

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Nihon Mirise was at that time engaging in a fierce business battle
with the Yamada Corp. over the procurement of the engine for the
next-generation transport aircraft codenamed CX by the Air
Self-Defense Force. Kyuma took office as Defense Agency director
general (defense minister since this January due to the upgrading of
the agency to status of a ministry), but resigned over an
impropriate remark about the atomic bombing of Japan having been
"unavoidable," which drew fierce criticism.

Responding to an interview by Tokyo Shimbun, Kyuma yesterday evening
admitted to having attended the dinner. He said, "Although I do not
recall the details, I certainly met the former executive director
right after I took office as defense minister. It's no mistake that
I did not pay the bill."

The rules for state ministers, senior vice ministers and
parliamentary secretaries, adopted at a cabinet meeting in 2001,
stipulate that they must not engage in practices that could invite
suspicion of the people, such as being entertained by industries
with connections to the ministry or agency.

The entertainment in this case could infringe on the rules, but
Kyuma explained, "Nihon Mirise is not a related company. I would not
have accepted the invitation, if I had been invited by the former
executive director. Another person invited me to the dinner. When I
went to the restaurant, the former executive director was there. He
explained about the trouble between his company and Yamada Corp."

9) Yamada Yoko Corp. was not punished for overcharging Defense
Agency on helicopter parts after explaining situation to Moriya

ASAHI (Page 39) (Excerpt)
October 26, 2007

Six years ago, Yamada Yoko Corp., a trading company specializing in
defense procurement, requested an exorbitant amount of money for
procuring helicopter parts for the Maritime Self-Defense Force
(MSDF). The then Defense Agency investigated the matter, according
to an informed source. At that time, the Yamada Corp. reportedly
explained the details of the situation to Takemasu Moriya, the
former vice defense minister who was then director-general of the
Defense Bureau. After that, Yamada Corp. was never penalized for
overcharging, and according to an informed source in the ministry,
"Voices of suspicion were raised about the way this was handled."

10) Mainichi opinion poll: 44 PERCENT want the DPJ to win in the
next Lower House election, five points higher than the rate for the
LDP (Mainichi)

MAINICHI (Page 5) (Excerpt)
October 26, 2007

In a nationwide poll conducted Oct. 20-21, the Mainichi Shimbun
asked the question, "Which party to you think you would like to win
in the next election of the House of Representatives?" In the
replies, 44 PERCENT of the public picked the Democratic Party of
Japan (DPJ or Minshuto), while 39 PERCENT chose the Liberal
Democratic Party (LDP). Another 11 PERCENT picked the "other party"
category. This is the fourth time that the same question has been
asked in the Mainichi poll: August 27-28; Sept. 12-13; and Sept.
25-26. The LDP received responses of 37 PERCENT , 39 PERCENT , 41

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PERCENT , and now 39 PERCENT in the surveys, while the DPJ scored
44 PERCENT , 43 PERCENT , 45 PERCENT , and 44 PERCENT . In all
cases, the DPJ rated higher than the LDP. The gap between the two
parties' ratings, which was 4 points in the two previous polls, has
widened slightly to 5 points.

Based on those who support or do not support the Fukuda Cabinet, the
poll found 72 PERCENT of the non-supporters favoring a DPJ victory,
but even among the supporters, 28 PERCENT wanted the DPJ to win.
Based on party support, 88 PERCENT of the LDP supporters and want
the LDP to win, and only 6 PERCENT want a DPJ victory. Among DPJ
supporters, 95 PERCENT want the DPJ to win, and 3 PERCENT want the
LDP to win.

Among those supporting no party, the mutohaso, 30 PERCENT favored
the LDP and 41 PERCENT the DPJ.

The survey method: The poll was carried out over two days, Oct.
20-21, using a computerized random dialing system. The number of
persons who responded nationwide totaled 1,064.

11) Fukuda-Ozawa debate set for Oct. 31

SANKEI (Page 5) (Full)
October 26, 2007

The party heads of the largest parties in the two chambers of the
divided Diet will have a one-on-one debate for the first time later
this month.

An agreement was reached yesterday for the Liberal Democratic Party
(LDP) and Democratic Party of Japan (DPJ) to hold a party-head
debate on Oct. 31. LDP Diet Affairs Committee Chairman Tadamori
Oshima talked with his DPJ counterpart Kenji Yamaoka on the phone
yesterday and decided on the debate. Ozawa last had a one-on-one
debated with former Prime Minister Shinzo Abe on May 30. It will be
Ozawa's first debate with Fukuda.

They are expected to debate how Japan should contribute to the
international community in connection with new antiterrorism
legislation to continue the Maritime Self-Defense Force's refueling
mission in the Indian Ocean and former Vice Defense Minister
Takemasa Moriya's suspected free golf with and wining and dining by
a defense contractor.

12) LDP, New Komeito alarmed at hepatitis from tainted-blood issue

TOKYO SHIMBUN (Page 2) (Excerpts)
October 26, 2007

It has been revealed that the Ministry of Health, Labor and Welfare
(MHLW) have left documents listing the names of patients who
contracted hepatitis C after being administered the tainted blood
product fibrinogen untouched for many years. On this problem,
criticism is intensifying against the government. The government has
announced measures to trace about 280,000 persons who were
administered the tainted blood product and to urge them to undergo
examinations or receive treatment. But the Democratic Party of Japan
(DPJ) is poised to thoroughly pursue the issue in the Diet, calling
it "the second drug-induced AIDS" problem.

The project team of the Liberal Democratic Party (LDP) and the New

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Komeito tasked with working out measures to contain hepatitis held
an emergency meeting yesterday. A number of participants lashed out
at the ministry, one assailing: "It is strange that the ministry has
not properly grasped how many persons were administered the
fibrinogen." Another said: "The ministry should report by next week
on how to track patients."

Such harsh views from ruling party members reflect their desire to
put a process in motion to resolve the hepatitis problem by taking
steps swiftly before public distrust grows, as it did in the
pension-record case.

The project team of the ruling parties has already decided to
include in next fiscal year's budget subsidies for high interferon
treatment costs for hepatitis B and C patients.

The team has also decided to draw out a basic bill designed to
combat the disease, including measures to improve equipment for
early detection of the disease and medical institutes, and to assist
research and development. It aims to submit the bill to the current
Diet session.

Meanwhile, the DPJ is ready to drive the government into corner by
grilling it over the hepatitis issue, besides a series of scandals
involving the Defense Ministry. In a House of Representatives
Health, Labor and Welfare Committee meeting, the DPJ demanded
summoning responsible senior MHLW officials at that time to the Diet
as unsworn witnesses and called for intensive deliberations on the
issue. Additionally, it indicated invoking its administrative
investigation right.

SCHIEFFER

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