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Cablegate: Japanese Morning Press Highlights 11//07

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UNCLAS SECTION 01 OF 14 TOKYO 005063

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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 11//07


Index:

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

4) Prime Minister Fukuda readies for a US visit filled with pending
issues: MSDF refueling operations, USFJ realignment, North Korea
(Nikkei)

War on terror:
5) MSDF refueling operations in the Indian Ocean end today after six
years with services for 11 countries (Nikkei)
6) Pentagon concerned that withdrawal of MSDF from Indian Ocean will
affect warship refueling arrangements (Sankei)
7) Fear that US-Japan relations will be strained due to ending of
antiterrorism law and result may speed up Washington decision to
remove DPRK from terror list (Tokyo Shimbun)
8) US warship after MSDF refueling returned to port as is (Yomiuri)

9) Chief Cabinet Secretary Machimura: No problem with MSDF refueling
multipurpose warships in the Indian Ocean (Asahi)
10) Defense Ministry division director to be summoned to testify at
Lower House special committee on terrorism (Asahi)

Defense scandals:
11) Former Defense Minister Kyuma took money from Yamada Yoko Corp.
billed as "carfare" (Mainichi)
12) Former Vice Defense Minister Moriya knew in March about presence
of Nihon Mirise defense contractor at ministry meeting but lied
about it in Diet testimony (Nikkei)

Defense issues:
13) Prime minister, Okinawa governor agree to early relocation of
Futenma Air Station (Yomiuri)
14) Central government, local government representatives to meet on
Futenma relocation issue on Nov. 7 (Sankei)
15) USFJ realignment subsidies to 33 affected local communities, but
Nago, Zama, which oppose the changes, are to get nothing (Asahi)
16) Japan to provide Pakistan with 5 billion yen more in yen-loan
aid in order to help it eliminate terrorism (Sankei)
17) Study group on Yokota dual use goes into overtime (Yomiuri
Online)

Political scene:
18) Mood of compromise between LDP, Democratic Party of Japan (DPJ)
continues to grow (Yomiuri)
19) DPJ Diet Steering Committee Chairman Kenji Yamaoka used a
historical slur about the Ainu (Mainichi)

20) ROK Foreign Minister denies that "regret" for Kim Dae Jung
abduction was an apology (Asahi)

Articles:

1) TOP HEADLINES

Asahi & Yomiuri:
Panel in final report: Successive heads of Social Insurance Agency
most responsible for pension record fiasco

Mainichi:

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Prime minister admits state's responsibility for drug-induced
hepatitis C infections

Nikkei:
BOJ report predicts 2.1 PERCENT growth for FY2008 but warns of
uncertainties

Sankei & Tokyo Shimbun:
Health panel in final report finds that identifying 40 PERCENT of
missing pension records will be hard

Akahata:
MSDF to withdraw from Indian Ocean today

2) EDITORIALS

Asahi:
(1) Japan should rethink role in war on terrorism, taking
opportunity of MSDF withdrawal from Indian Ocean

Mainichi:
(1) BOJ report: Aim at emerging from policy of ultra-low interest
rates
(2) Impermissible fabrication of performance of fire-resistant
materials, making light of human lives

Yomiuri:
(1) Long way to go to restore public trust in pension system
(2) Construction material maker Nichias fabricates performance of
fire-resistant materials

Nikkei:
(1) BOJ decision to keep interest rate unchanged reflects
consideration to growing uncertainties
(2) Report reveals Social Insurance Agency tried to cover up bad
news

Sankei:
(1) Fabricated performance of fire-resistant materials: Aware of
high cost of illegalities
(2) Reporting on teachers refusing to sing Kimigayo necessary

Tokyo Shimbun:
(1) Report unveils how sloppy Social Insurance Agency's
recordkeeping was
(2) No help for company that concealed falsified performance of
fire-resistant performance

Akahata:
(1) Open questioning first step to preventing false charges

3) Prime Minister's Official Residence (Kantei)

Prime Minister's schedule, Oct. 31

NIKKEI (Page 2) (Full)
November 1, 2007

10:40
Met with Deputy Chief Cabinet Secretary Futahashi at Kantei.

12:22

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Met with Futahashi.

13:56
Met with Vice Health and Labor Minister Erikawa and Social Insurance
Agency Director-General Sakano.

15:00
Met with Vice Foreign Minster Yachi. Afterwards, met with LDP Osaka
Chapter Chair Taro Nakayama.

16:03
Met with Minister of State for Economic and Fiscal Policy Ota and
others. Later, met with Vice Environment Minister Tamura and Global
Environment Bureau Director-General Minamikawa.

17:08
Met with Vice Minister of Finance for International Affairs
Shinohara. Afterwards, met with Okinawa Gov. Nakaima.

19:04
Dined with his secretaries at "Les Saisons" at Imperial Hotel.

21:48
Arrived at his private residence in Nozawa.

4) Prime Minister Fukuda to leave for US to meet President Bush on
Nov. 16 with armful of pending issues

NIKKEI (Page 2) (Full)
November 1, 2007

The first meeting between Prime Minister Fukuda and United States
President Bush is likely to take place in Washington on Nov. 16.
There are no prospects in sight for an early passage of a new bill
designed to resume the Maritime Self-Defense Force's (MSDF)
refueling mission in the Indian Ocean. It is also speculated that
the US might delist North Korea as a state sponsor of terrorism in
November. The two leaders will hold their meeting at such a
sensitive time. Additionally, there are issues that have been
smoldering between the two countries as the potential causes for
bilateral friction, such as the pending US force realignment in
Japan and possible cuts in Japan's host nation support. The prime
minister will set out for the US with a heavy load on his
shoulders.

The prime minister is scheduled to leave for the US on Nov. 15 and
meet with President Bush over lunch at the White House the following
day. He is expected to explain the outlook for the fate of the new
refueling legislation, hoping to obtain the understanding of the
President.

There are numerous pending issues between Japan and the US. Former
Vice Defense Minister played a key role in dealing with the issue of
US force realignment. Moriya, however, has since left the ministry,
and a series of scandals involving him, including his cozy ties with
a defense contractor, has been cropping up, increasing the
confusion.

Fukuda met Okinawa Governor Hirokazu Nakaima for the first time at
his official residence (Kantei) yesterday, in which he said in
response to a request by Nakaima for special consideration to the
base issue: "I would like to make utmost efforts in that direction."

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The government will resume talks on the Futenma relocation issue
with local communities on Nov. 7, but dramatic progress cannot be
expected under the current situation.

On host nation support, the Finance Ministry has announced plans to
cut the so-called sympathy budget by 10 billion yen when the current
special agreement is renewed at the end of March 2008. But US
Secretary of Defense Gates is expected to call on Japan to reduce

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the US burden when he visits Japan on the 7th. A conclusion is
unlikely to be reached before the compilation later the year of the
budget bill for next fiscal year.

Beef remains as another thorny issue. The US is calling on Japan to
abolish its import conditions. Japan has set the condition of
importing only beef from cattle 20 months of age or younger, but the
US has claimed that Japan should abide by the international
standard. The government fears that if Japan makes a compromise on
food safety, consumers might react strongly.

Above all, issues with North Korea are lying as the main pending
problem. The prime minister met Vice Foreign Minister Shotaro Yachi
yesterday and listened to his briefing about the positions of the US
government and Congress toward North Korea, based on the contents of
talks he had held with US Assistant Secretary of State Christopher
Hill during his recent visit to the US. The prime minister has
emphasized a policy of dialogue toward Pyongyang, but should
Washington delist the North at an early date, his policy switch
might elicit an angry response from hard-liners toward North Korea.


In the Diet, the opposition camp has control of the House of
Councillors. Under this situation, Prime Minister Fukuda fears that
if foreign countries judge Fukuda as lacking the competence required
of a prime minister, he will lose international confidence. The
first Japan-US summit will be a major challenge for the prime
minister.

5) Six-year MSDF refueling mission to be halted

NIKKEI (Page 2) (Full)
November 1, 2007

The Maritime Self-Defense Force (MSDF) is to halt today its six-year
refueling operation in support of the antiterrorism campaign in and
around Afghanistan, which was Japan's international contribution,
like its activities to support Iraqi reconstruction. With the halt
of the MSDF refueling mission, Japan's fight against the war on
terror will reach a major turning point.

Chief Cabinet Secretary Nobutaka Machimura expressed regret of the
withdrawal of the MSDF in a press conference yesterday, saying:
"Japan alone will drop out of the ongoing war on terror. This will
leave a serious stain on Japan's future." Foreign Minister Masahiko
Koumura also expressed his concern, noting, "The MSDF's activities
are a significant basis for the maritime interdiction operation
(MIO). The efficiency of the MIO will greatly drop."

Following the terrorist attacks on the United States in September
2001, then Prime Minister Junichiro Koizumi ordered the creation of
the Antiterrorism Special Measures Law. The law was established to
extend logistic support to foreign vessels engaging in the campaign
to eliminate terrorist forces. Based on the law, Japan for the first

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time dispatched the Self-Defense Forces overseas in a time of war.

The MSDF in December 2001 began supplying fuel in the Indian Ocean.
One year later, in the face of strong resistance, the government
dispatched an Aegis destroyer, having the SDF carry out overseas
operations for a long time. In the first two year of its operations
in the Indian Ocean, the MSDF supplied 90 PERCENT of its fuel to US
ships, but it supplied more oil to French and Pakistani vessles
after 2003, when the Iraq war started. The MSDF provided fuel to
warships from as many as 11 countries.

Among the countries taking part in the MIO, Japan is the only
country that supplied fuel free of charge. Ambassadors to Japan from
11 countries, including the US, Britain, and Afghanistan, yesterday
held briefing to explain the importance of the MSDF operations to
lawmakers of ruling and opposition parties.

However, the fate of a new bill to continue the MSDF mission is
uncertain at present. The opposition camp has strongly criticized
the alleged diversion of fuel provided by the MSDF to a US supply
ship in February 2003 for use in the Iraq war, as well as the
government's correction of the cover-up of a data error the amount
of fuel supplied to a US ship. A senior Defense Ministry official
said dejectedly: "If deliberations on the new bill slip to next
year's ordinary session, the MSDF refueling mission might be
suspended for one year."

Prime Minister Yasuo Fukuda told the press last night: "I'm
disappointed with the halt of the MSDF mission. I hope that the
operation will be resumed as early as possible." The government is
going to release a statement that says it aims to restart the
activities as quickly as possible.

6) Pentagon concerned about MSDF pullout, impact on operations

SANKEI (Page 7) (Abridged)
November 1, 2007

WASHINGTON-Japan will shortly call off the Maritime Self-Defense
Force's refueling activities in the Indian Ocean. In this regard,
the US Department of Defense is concerned about potential
repercussions on the war on terror, an official said on Oct. 30.
This Pentagon official also indicated that the United States does
not want to see its bilateral alliance with Japan worsen as a
consequence of the MSDF's withdrawal. However, the Pentagon official
implied the US government's dissatisfaction, since the MSDF is not
expected to resume its refueling activities. The official was
speaking to Japanese reporters, with Secretary of Defense Gates
scheduled to visit Japan in early November.

The Pentagon official noted that naval vessels from countries like
Pakistan and Italy would have to make more port calls for fuel after
the MSDF's withdrawal and would lose time for patrolling.
Furthermore, the Pentagon official also said those vessels would be
exposed to terrorist attacks or other eventualities should they make
more port calls. This official likened such a case to the incident
in October 2000, in which a small boat attacked the USS Cole, a US
Navy destroyer, when she was anchored for fuel in the port of Aden,
Yemen, and many were killed or wounded.

7) Japan-US relations may be strained with antiterrorism law due to
expire today

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TOKYO SHIMBUN (Page 7) (Full)
November 1, 2007

Yasuyuki Oguri, Washington

With the expiration today of the Antiterrorism Special Measures Law,
Japan will suspend the Maritime Self-Defense Force's (MSDF)
refueling mission in the Indian Ocean. The US government takes this
suspension as a matter Japan should handle and as an unavoidable
case. However, the curtailment could rapidly strain Japan-US
relations, and could affect the US decision on whether North Korea
will be removed from the list of state sponsors of terrorism.

At a time when the ruling Liberal Democratic Party (LDP) suffered a
devastating defeat in the Upper House election, the US government
half-judged that it had become difficult for Japan to continue the
refueling operation. While Washington is unhappy with the
suspension, there is no mood to criticize Japan.

Lying behind Washington's calm attitude is its judgment that
although it expects Tokyo to resume the refueling mission as quickly
as possible, if it puts strong pressure on Japan to do so, the
result would simply create a strong impression that the US was
forcing Japan to engage in the refueling mission and that could have
an adverse effect on Diet deliberations on new antiterrorism special
measures legislation. Out of consideration for Japan, Secretary of
Defense Gates, who will visit Japan in early November, will not
actively take up this matter.

Speaking of this attitude of the US government, Bruce Klinger, a
senior research fellow for Northeast Asia at the Heritage
Foundation, said, "I think the US government, which is considering
delisting North Korea as a state sponsor of terrorism, does not
reproach Japan regarding the refueling issue." He indicated that the
US could not be hard on Japan over the refueling issue since the US
envisions a possible delisting of North Korea, which Japan is
opposing.

In other words, it has become easy for the US now to delist North
Korea because Japan has had to suspend the refueling mission. But if
North Korea is delisted, Japan will be certain to raise an
objection.

In addition to these issues, Japan and the US have other issues that
could trigger friction such as a cut in Japan's host-nation
support.

Should the refueling issue spark trouble over other issues, such as
the delisting of North Korea and the reduction host-nation support,
there is a good possibility that the currently solid Japan-US ties
could worsen rapidly.

8) MSDF-refueled US vessel may have returned straight home; Defense
Ministry asking US for verification

YOMIURI (Page 4) (Full)
November 1, 2007

Defense Ministry Operations Planning Bureau Director-General
Nobushige Takamizawa revealed in yesterday's meeting of the House of
Representatives Special Committee on Prevention of Terrorism that

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there is a possibility that a US vessel refueled by the Maritime
Self-Defense Force in the Indian Ocean did not take action in line
with the objectives of the Antiterrorism Special Measures Law and
that the ministry has asked the US side for its confirmation.

Democratic Party of Japan (DPJ or Minshuto) lawmaker Yorihisa
Matsuno, based on the US cruiser Antietam's website, pointed out the
possibility that the US vessel refueled by the MSDF in waters off
Mumbai, India, on December 18, 2001, returned straight to the United
States via Singapore. Matsuno then asked, "Did it operate in line
with the spirit of the Antiterrorism Law?"

9) Chief Cabinet Secretary Machimura: No problem with MSDF supplying
fuel to ship with more than one mission

ASAHI (Page 4) (Full)
November 1, 2007

In a Lower House Antiterrorism Committee session yesterday, Chief
Cabinet Secretary Nobutaka Machimura took the view that there is no
problem with the Maritime Self-Defense Force (MSDF) in the Indian
Ocean providing fuel to a vessel engaged in more than one mission.
The US Defense Department said in a statement released recently: "It
is difficult to trace how the fuel Japan supplied was used, because
US Navy vessels often engage in more than one mission."

In response to a question by Seiken Akamine of the Japanese
Communist Party, Machimura stated:

"What is important is that a ship that Japan provides oil is engaged
in the maritime interdiction operation. As long as that
qualification is satisfied, there is no problem with whether a ship
is engaged in another mission."

Akamine questioned, "Don't you think that you means that the MSDF
can supply oil to even a warship that is carrying out a large
air-raid in the Iraq war?" Machimura answered: "I think (I)
understand the law correctly."

10) Ex-MSDF official to be called as unsworn witness

ASAHI (Page 4) (Full)
November 1, 2007

The House of Representatives Special Committee on Antiterror
Measures held a meeting of its directors yesterday on the Defense
Ministry's cover-up of an error in the quantity of fuel supplied by
the Maritime Self-Defense Force to a US Navy oiler. In the meeting,
the committee directors agreed to summon Masayoshi Teraoka, a former
director of the Plans and Programs Division at the MSDF Maritime
Staff Office, to the committee on the morning of Nov. 5 as an
unsworn witness as demanded by the opposition parties. The committee
will also call in four academic experts on the afternoon of the same
day to hear their views. They include Kazuhisa Ogawa, a military
analyst, and Kenji Isezaki, a professor at the Tokyo University of
Foreign Studies.

11) Yamada Yoko found to have given former Defense Minister Kyuma
more than 100,000 yen from slush funds as transportation expenses in
2005

MAINICHI (Page 30) (Full)

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November 1, 2007

It was found that Yamada Yoko, a trading company specializing in
defense procurement, which had treated former Administrative Vice
Defense Minister Takemasa Moriya (63) with free rounds of golf, had
approximately 2 million yen as slush funds and gave portions of the
funds to politicians as transportation expenses. According to an
involved source, the company gave more than 100,000 yen to then
Defense Minister Akio Kyuma of the Liberal Democratic Party (LDP) in
2005 as transportation expenses. The Tokyo District Public
Prosecutors Office knows these facts and is pressing ahead with
efforts to shed light on Yamada Yoko's payoffs to politicians and
bureaucrats.

The same source also said that Kyuma received more than 100,000 yen
as transportation expenses when he attended a wedding reception for
a family member of the owner of Yamada Yoko at the end of 2005.
Yamada Yoko has accumulated slush funds worth about 2 million yen a
year by cashing gift certificates purchased by its affiliate. The
cash given to Kyuma was disbursed from these funds.

Kyuma was on close terms with the family of the owner of Yamada
Yoko. He knew Motonobu Miyazaki (69), former executive director of
the company, who has repeatedly entertained Moriya, from about 10
years ago. It has also been found that Kyuma had been invited for
free meals by Miyazaki since last fall.

Miyazaki is reportedly telling investigators about Yamada Yoko's
slush funds on a voluntary basis. Investigators appear to be making
efforts to get to the bottom of the matter.

12) Attendance of Nihon Mirise employee at Defense Ministry meeting
reported to Moriya in March; Moriya suspected of having made false
testimony in Diet

NIKKEI (Page 43) (Full)
November 1, 2007

It was learned from a related source yesterday that an employee of
Nihon Mirise, a company established by Motonobu Yamada (69), a
former executive director of Yamada Yoko, was present at a meeting
on the procurement of engines for the next-generation transport
aircraft, codenamed CX, held in January at the ministry, causing a
problem within the ministry, since Nihon Mirise was not a
contractor. The matter was reported to then Administrative Vice
Defense Minister Takemasa Moriya (63) in March. Regarding this
issue, Moriya noted in his sworn testimony in the Diet, "I am not
aware of that matter." There is a possibility of Moriya being
charged with making false testimony.

According to the same source, the objective of the meeting was to
discuss the procurement of the CX engine. Representatives of
Kawasaki Heavy Industries, the CX manufacturer, General Electric
(GE) of the US, the engine manufacturer, and Yamada Yoko, GE's Japan
agent, took part in it. The employee of Nihon Mirise was allegedly
present at this meeting.

Nihon Mirise replaced Yamada Yoko in late July as GE's Japan agent.
However, since it had not yet signed an agent contract with GE as of
January, the company was not a contracting company for the CX
engine.


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As such, a question arose in the Defense Ministry, and the ministry
approved his attendance as an interpreter for the GE
representative.

Nihon Mirise and Yamada Yoko were fighting in a civil suit over
defense trade rights, such as an agent contract for GE, and the
headhunting of Yamada Yoko employees by Nihon Mirise.

Since there was fear that the attendance of a representative of
Nihon Mirise, an outsider, at an important in-house meeting could
draw fire outside the ministry, details of the matter were allegedly
reported to top officials at the time, including then Defense
Minister Akio Kyuma and Moriya.

Taking up this matter during the Diet summoning of Moriya as a sworn
witness, New Komeito lawmaker Shigeyuki Tomita questioned him,
"Yamada Yoko was GE's agent at the time, and yet a representative of
Nihon Mirise also took part in the meeting. Don't you think it is
strange that an irrelevant person was present at the meeting, unless
a very influential person approved his attendance?"

Moriya replied, "I am not aware of that fact." His reply is
inconsistent with the allegation given by the related source, who
said that the matter was reported to Moriya in March.

The Diet Testimony Law stipulates that if a sworn witness makes
false testimony in Diet summoning, this person could be given a
prison sentence up to 10 years.

13) Fukuda, Nakaima reach agreement on early relocation of Futenma
Air Station

YOMIURI (Page 4) (Full)
November 1, 2007

Prime Minister Yasuo Fukuda held talks yesterday with Okinawa
Governor Hirokazu Nakaima for the first time after assuming office
and reached an agreement to aim at the early relocation of the US
Marine Corps' Futenma Air Station (in Ginowan) in the prefecture.
Okinawa, which seeks changes to the government's plan to build a
V-shaped pair of runways at Camp Schwab (in Nago), has been at
loggerheads with Tokyo. An agreement was reached yesterday for the
two sides to hold talks while making efforts to find common ground.

14) Government to hold consultations on Nov. 7 with Okinawa on
relocation of US Futenma Air Station

SANKEI (Page 5) (Full)
November 1, 2007

The government decided yesterday to hold a discussion on Nov. 7 with
Okinawan municipalities on its plan to relocate US Marine Corps'
Futenma Air Station. Consultations on the relocation of the Futenma
Air Station to off Camp Schwab (Nago City, Okinawa) have been
suspended since January due to the clashes of opinions over a plan
to build a V-shaped pair of runways.

Chief Cabinet Secretary Nobutaka Machimura stated yesterday in a
Lower House Antiterrorism Special Committee session: "The Futenma
relocation plan is important for the realignment of US forces in
Japan, as well as for Japan's security. I want to do my best so that
the relocation plan will be implemented as early as possible."

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The government aims to break the impasse by letting the Prime
Minister's Official Residence (Kantei) take the initiative in
coordinating views, having Machimura take charge of the relocation
issue. However, there is a big gap in views between the GOJ and the
local government, which wants the V-shaped pair of runways built
offshore as far as possible. It will be difficult to find common
ground.

Prime Minister Yasuo Fukuda met with Okinawa Gov. Hirokazu Nakaima
yesterday evening for the first time in the Kantei. Fukuda showed
his understanding for Nakaima's request that the government should
respect the views of local governments. After the meeting, Fukuda
told the press: "I want to carry out negotiations in a serious
manner in consideration of Okinawa's heavy burden."

15) Nago, Zama off the list for USFJ realignment incentives

ASAHI (Page 1) (Full)
November 1, 2007

The Defense Ministry yesterday designated 33 municipalities to be
subsidized in compensation for their base-hosting burden along with
the realignment of US forces in Japan. In May this year, the Diet
enacted a law for special measures to implement the US military's
realignment. The special measures law provides plans to subsidize
base-hosting localities. This is the first time for the Defense
Ministry to designate municipalities for its subsidization under the
law.

Specifically, the Defense Ministry has designated Yokosuka, Kanagawa
Prefecture, for the city's agreement to host the USS George
Washington, a nuclear-powered aircraft carrier. However, the Defense
Ministry did not designate Nago, Okinawa Prefecture, for its
objection to the planned relocation of Futenma airfield. In its
decision this time, the Defense Ministry clearly segregates
localities with carrots and sticks according to the degree of their
cooperation in the process of realigning the US military presence in
Japan.

According to the Defense Ministry, each designated municipality will
be notified of subsidies in November. In the current fiscal year,
the government will start to subsidize those designated
municipalities. The Defense Ministry, according to its Local
Cooperation Bureau, will additionally designate other municipalities
if they accept realignment plans.

The Defense Ministry-designated municipalities include the city of
Tsugaru in Aomori Prefecture and the city of Chitose in Hokkaido.

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Tsugaru has accepted the installation of advanced early warning

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radar for intercepting intercontinental ballistic missiles. Chitose
has accepted the dispersive relocation of F-15 fighters from US
military bases to Chitose base for training purposes.

Meanwhile, the Defense Ministry precluded six municipalities that
are opposed to relocation plans for US forces. Those deselected
municipalities include the city of Iwakuni in Yamaguchi Prefecture.
Iwakuni is against the planned relocation of carrier-borne aircraft
to Iwakuni Air Station. The US Army plans to locate the 1st Corps'
command functions to Camp Zama in Kanagawa Prefecture. Along with
this command relocation, Camp Zama will reorganize its headquarters.
Sagamihara City-one of Camp Zama's local hosts-is on the list of

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designated municipalities for its acceptance of the plan. However,
another local host, Zama City, is off the list for its objection to
the plan.

16) Yen loans to Pakistan to be boosted by 5 billion yen: New
contribution intended to help root out terrorism

SANKEI (Page 1) (Full)
November 1, 2007

Following the expiration of the Antiterrorism Special Measures Law
expires on Nov. 1, Maritime Self-Defense Force's vessels will pull
out of the Indian Ocean on the 2nd. With this in mind, the
government yesterday decided to substantially boost economic
assistance to Pakistan for this fiscal year. Though assistance to
that country has thus far been restricted to oil and water supplies,
the government will increase yen loans from 25 billion yen last year
to 30 billion yen starting this fiscal year. The increased amount
will be used for assistance for the development of the tribal areas
located in the border area near Afghanistan.

The area for the envisaged development is called the Federally
Administered Tribal Area (FATA), located in northwestern Pakistan.
FATA, which stretches along the border near Afghanistan, is a
stronghold of the Taliban. The aim of assisting the development of
the area is to eliminate the influence of the Taliban.

Japan's credibility in the international community is bound to
decline because of its pullout from the maritime interdiction
operations in the Indian Ocean. The government has characterized the
assistance as a new contribution to the fight against terrorism.

FATA has remained an autonomous area outside the reach of the
central government since 1947, when Pakistan was founded. A delay in
development has made the area a center for drug smugglers. Taliban
remnants that fled from Afghanistan are active there, making fierce
terrorist attacks on North Atlantic Treaty Organization's (NATO)
troops in the border area. The US government has sounded out the
possibility of Japan's cooperation for the development of the area,
noting that in order to prevent terrorist attacks in Afghanistan, it
is essential to develop FATA and make it self-sufficient.

An MSDF supply vessel has assisted operations to prevent moves of
terrorists and the transportation of arms and ammunition by
supplying fuel and water to vessels of 11 countries. Its operations
have been highly appreciated by many countries, including Pakistan.
Japan has supplied the second-largest amount of fuel to Pakistani
vessels, following the amount supplied to US oilers.

17) Negotiations to continue on joint use of Yokota Air Base:
Japanese, US governments unable to reach agreement by end of month

YOMIURI ONLINE (Tama edition) (Full)
October 31, 2007

The Japanese and US governments, unable to reach an agreement on the
joint use of Yokota Air Base by the deadline set for the end of
October, have decided to continue negotiations into November.

A passage was included on joint use in the final report on US force
realignment in Japan, announced in May last year, that went: " The
USG and GOJ will conduct a study of the specific conditions and

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SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 11//07

modalities for possible civilian-military dual-use of Yokota Air
Base, to be completed within 12 months from commencement."

Based on this agreement, both governments established a study group
on joint military-civilian use of Yokota Air Base consisting of
responsible foreign and defense affairs officials. The study
commenced last year in October. The aim was to complete the study by
the end of this October, and until now, the group has met a total of
eight times.

A source in Foreign Ministry's Status of Forces Agreement Office
said, "The study effort on such matters as the specific conditions
is still not ended." Recognizing that agreement could not be reached
by the end of October, the official added, "We would like to
conclude the study as early as possible."

Both governments have decided to make a judgment in the end on
whether joint use is feasible or not based on the results of the
study group's report.

18) LDP, DPJ moving closer; Shift from confrontation to coordination
evident after party-head session

YOMIURI (Page 4) (Excerpts)
November 1, 2007

The first party-head meeting between Prime Minister Yasuo Fukuda and
Democratic Party of Japan (DPJ or Minshuto) President Ichiro Ozawa
continued to rock the ruling and opposition blocs yesterday. Ozawa's
meeting with Fukuda drew fire from all opposition parties but the
DPJ, sparking a sense of alarm against a possible grand coalition by
the LDP and DPJ. At the same time, the two parties reached an
agreement on new Diet personnel appointments rules and decided to
hold prior consultations on Political Funds Control Law revision and
begin talks on the integration of the ruling coalition's and the
DPJ's plans for revising the Natural Disaster Victims Relief Law.
The Diet has now begun moving away from confrontation to
coordination.

Given the schedule for Fukuda and Ozawa to meet again on Nov. 2, the
DPJ has confirmed the policy course to postpone producing a
counterproposal to the Antiterrorism Special Measures Law until
after their meeting. A senior DPJ lawmaker explained: "In the
upcoming party-head session, there is a possibility that the LDP
will support the DPJ's civilian-assistance-oriented plan. We should
not demonstrate an adversarial stand by presenting a counterproposal
at this point."

Meanwhile, Japanese Communist Party Chairman Kazuo Shii in a press
conference yesterday criticized Ozawa, saying: "It is like the LDP
and DPJ are hijacking the Diet. Mr. Ozawa is repeating closed-door
sessions against his own words that he would discuss matters openly
before the public. There is no way to explain his behavior."

Social Democratic Party head Mizuho Fukushima, too, complained in a
press conference: "Even former Prime Minister Koizumi held talks
with all opposition party heads. An attempt to decide on matters by
just two party heads by suspending the Diet is unheard of. I cannot
understand at all the significance of the largest opposition party
acceding to a request and its advantage. I am against a thing like a
grand coalition."


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A variety of reactions also came from within the ruling parties.

There have been voices of concern in the New Komeito about the LDP
and DPJ moving closer to each other. Despite that, Secretary General
Kazuo Kitagawa in a press meeting yesterday underlined the party's
"cool-headedness," saying: "The political situation is clearly such
that opposition party policy has to be reflected in decision-making
at times. (The prime minister and LDP executives) have informed us
of (the party-head talks) in advance. There is no concern."

19) DPJ's Diet Affairs Committee Chair Yamaoka says in meeting with
LDP counterpart: "We are barbarian tribes of Ainu origin"

MAINICHI (Page 2) (Full)
November 1, 2007

So Watanabe

At the beginning of a session of Diet affairs policy chiefs between
the major opposition Democratic Party of Japan (DPJ) and the ruling
Liberal Democratic Party (LDP), DPJ Diet Affairs Committee Chairman
Kenji Yamaoka said: "(Of the four attendees), you two are peers. We
are barbarian tribes of Ainu origin." Yamaoka retracted these
remarks at a press briefing held immediately after the meeting, but
his gaffe is likely to create a stir, as the DPJ supported Kaori
Tahara, an Ainu who ran as an independent in the Hokkaido
constituency in this summer's Upper House election.

Meeting the press, Yamaoka said, "I take back any expression leading
to discrimination. If I caused any misunderstanding, I feel sorry
for that," and retracted his controversial remarks. He added: "I
used that expression to mean sturdiness and that I represent working
people. I don't agree with those who think the use of that
expression in itself is discrimination. I don't look down on people
of Ainu origin. I mentioned it, but I did so because I respect the
Ainu."

Susumu Emori, professor (of Japanese history) at Tohoku Gakuin
University and an expert on the Ainu problem, said:

"Assuming that the Ainu are barbarians, he apparently made those
remarks. He may be unaware of that, but that is a problem. I
question his qualifications as a responsible legislator."

20) ROK foreign minister says, "Regret means regret," in response to
ROK ambassador's remarks on "abduction of Kim Dae Jung"

ASAHI (Page 7) (Abridged)
November 1, 2007

Tadahisa Takatsuki, Seoul

South Korean Ambassador to Japan Yu Myung Hwan on Oct. 30 conveyed
"regret" to Foreign Minister Koumura regarding the 1973 abduction of
Kim Dae Jung. In this regard, South Korea Foreign Affairs & Trade
Minister Song Min Soon yesterday noted, "Regret means regret," and
steered clear of mentioning that the word "regret" means "apology"
by the South Korean government. Japan has taken the ambassador's
mention of "regret" as meaning an "apology." According to several
informed sources, South Korea, which, out of consideration for
public opinion, wanted not to give a strong impression that it
offered an apology to Japan, and Japan, which thought it was

TOKYO 00005063 014 OF 014

SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 11//07

necessary for South Korea to declare an apology in some form, tried
to settle the abduction case by interpreting "regret" in ways to
meet their respective convenience.

Song was replying to a question by a South Korean reporter asking,
"Did the ambassador's remark mean regret or apology?"

According to an informed source, soon after a report acknowledging
the then intelligence agency's involvement in the abduction of Kim
was released on Oct. 24, the South Korean government decided to
express "regret" to Japan and conveyed this decision to Japan. Out
of consideration for public backlash, South Korea found it necessary
to avoid using direct words expressing apology to Japan with one
South Korean government official noting, "Regret also means
apology." Japan therefore decided to take "regret" as an apology.
Both sides thus reached tacit consent.

In a meeting with South Korean Ambassador Yu on Oct. 30, Foreign
Minister Koumura said "I take regret as 'apology.'" Speaking of the
description mentioning "Japan's responsibility," Koumura asked the
ambassador to make sure that "that is not the view of the South
Korean government." Ambassador Yu said, "In my view, I think it is
not." Thus both sides settled the abduction case.

SCHIEFFER

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