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Cablegate: Japanese Morning Press Highlights 11/08/07

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UNCLAS SECTION 01 OF 12 TOKYO 005140

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: JAPANESE MORNING PRESS HIGHLIGHTS 11/08/07


Index:

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

Diet affairs:
4) Ruling coalition eyes 40-day extension of current Diet session to
allow enough time to pass the new antiterrorism bill (Yomiuri)
5) Antiterrorism bill expected to pass the Lower House next week,
now that Democratic Party of Japan (DPJ) refuses to respond to
revision talks (Nikkei)
6) Passage of regular law for overseas dispatch of the SDF will not
be until next year: Prime Minister Fukuda (Yomiuri)

Ozawa caper:
7) Ichiro Ozawa makes formal announcement of his decision to stay on
as head of the DPJ (Asahi)
8) Ozawa: Feelers beneath surface about possibility of a grand
alliance of LDP, DPJ were sent out two months ago (Mainichi)
9) Despite Ozawa's repentance, bad feeling still smolders in the DPJ
toward his recent caper (Sankei)

Defense and security issues:
10) Former Secretary of Defense Cohen, in Tokyo, says that it would
be a mistake for Japan to reverse course away from becoming an
"ordinary country" (Yomiuri)
11) Futenma council meets after ten months but ends with central
government and Okinawa local government as far apart as ever
(Yomiuri)
12) Former defense official testifies in Diet session that he
reported the discrepancy in MSDF refueling figures to superiors in
2003, which they deny (Yomiuri)
13) Most of huge slush fund of mostly embezzled money used by former
Yamada Yoko Corp. top executive for lavish treatment of former Vice
Minister Moriya (Asahi)
14) Finance Minister Nukaga denies he took 1 million yen as
"carfare" from Yamada Yoko owner (Asahi)

Foreign affairs:
15) New vice foreign minister, replacing Yachi, is Ambassador to
Indonesia Shin Ebihara (Nikkei)
16) Team of American specialists on Asia, including Richard Armitage
and Joseph Nye, issue report that labels China "the US' most
important relationship" (Sankei)

Articles:

1) TOP HEADLINES

Asahi, Mainichi, Yomiuri, Nikkei, Sankei, Tokyo Shimbun & Akahata:
Ozawa officially announces his intent to remain as DPJ leader, vows
to make all-out efforts to win next Lower House election

2) EDITORIALS

Asahi:
(1) Five requests to Ozawa-led Democratic Party of Japan
(2) Government urged to resolve Hepatitis-C issue following
recommendation through mediation

Mainichi:

TOKYO 00005140 002 OF 012


(1) Details of proposal for grand coalition still hidden
(2) Hepatitis suit: Health Ministry's conscience being tested

Yomiuri:
(1) Mess over Ozawa's resignation reveals DPJ's immaturity
(2) Steadily move negotiations on Futenma transfer issue forward

Nikkei:
(1) Government should quickly decide to introduce emissions trading
system
(2) Deferring repeated offensives shorter route to security

Sankei:
(1) DPJ should give priority to policies
(2) Explore settlement on Hepatitis issue

Tokyo Shimbun:
(1) It is prime minister's turn to talk about coalition proposal
(2) New system for police to record questioning could be acceptable

Akahata:
(1) Ozawa's flip-flop hard to understand

3) Prime Minister's Official Residence (Kantei)

Prime Minister's schedule, Nov. 7

NIKKEI (Page 2) (Full)
November 8, 2007

08:54
Met with Vice Defense Minister Masuda at Kantei.

11:28
Met with Chief Cabinet Secretary Machimura.

11:58
Had a luncheon with first-time House of Representatives members of
the LDP.

13:00
Attended a session of the Lower House Committee on Prevention of
Terrorism.

16:20
Met with Naigai News Co. Chairman Kiyomiya. Afterwards, met with
Minister of Internal Affairs and Communications Masuda and then met
with Headquarters for Regional Revitalization Director Yamamoto.

17:00
Attended a session of the IT Strategy Headquarters.

17:59
Met with former Deputy Chief Cabinet Secretary Nobuo Ishihara.
Afterwards, met with Vice Foreign Minister Yachi.

19:28
Met with National Defense Academy President Makoto Iokibe and others
at Imperial Hotel.

22:19
Arrived at his private residence in Nozawa.

TOKYO 00005140 003 OF 012

4) Extra Diet session likely be extended for about 40 days to secure
time for deliberations at Upper House on new antiterrorism
legislation

YOMIURI (Page 2) (Full)
November 8, 2007

Democratic Party of Japan (DPJ or Minshuto) President Ichiro Ozawa
revealed yesterday at a press conference his party's policy of
opposing the new antiterrorism special measures bill. The government
and ruling parties in turn started coordination to extend the
current Diet session for about 40 days until late December, revising
the plan for a one-month extension. The government and ruling camp
reached the judgment that it would now be necessary to take all
possible measures, including securing sufficient time for
deliberations at the House of Councillors, to pass the new
antiterrorism bill during the current Diet session. The government
and ruling camp intend, however, to continue to try to find a way to
approach the DPJ. In a bid to avoid a full-blown clash with the
opposition, they plan to put off until next week the passage of the
bill through the House of Representatives.

Following the DPJ's release of an outline of its set of
counterproposals to the government's new antiterrorism legislation,
Liberal Democratic Party (LDP) Secretary General Bunmei Ibuki
directed Diet Affairs Committee Chairman Tadamori Oshima to ask the
DPJ to work out a compromise bill. In a meeting later in the day of
the Lower House Special Committee on Prevention of Antiterrorism the
LDP called on the DPJ to start deliberation on revising the
legislation, but the main opposition party rejected the request.

With Ozawa having made it clear the party still opposes the new
antiterrorism bill, it has now become difficult to find a way to
resume consultations with the DPJ. The need therefore has grown
stronger for the ruling coalition to resort to re-adopting the bill
in the Lower House with the approval of a two-thirds majority, after
it is voted down in the Upper House.

There still remains concern that if the DPJ submits a censure motion
against Prime Minister Yasuo Fukuda to prevent the re-adoption of
the legislation, it might lead to Lower House dissolution. Most
members in the ruling coalition, though, are optimistic, with one
lawmaker saying, "The DPJ is no longer able to submit a censure
motion due to the turmoil caused by Ozawa."

There is a strong view in the ruling camp that the passage of the
new antiterrorism bill through the Lower House should now be delayed
to next week so as not to annoy the DPJ. The ruling coalition is
considering taking a vote on the bill at the special committee on
Nov. 12 and having it pass the Lower House on the 13th. Given these
circumstances, the special committee decided easily in its directors
meeting yesterday afternoon to hold today a question-and-answer
session for two hours.

5) New refueling legislation likely to clear Lower House next week
or later: DPJ determined not to respond to revision talks

NIKKEI (Page 2) (Slightly abridged)
November 8, 2007

The battle between the ruling and opposition parties over resumption

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of refueling operations in the Indian Ocean by the Maritime
Self-Defense Force (MSDF) has come to a standstill again, with the
Democratic Party of Japan (DPJ or Minshuto) toughening its
confrontational stance toward the ruling camp with the return of
President Ichiro Ozawa to the fold. The ruling camp wanted to take a
vote on the bill at the Lower House Terrorism Prevention and Iraq
Assistance Special Committee, but the DPJ is determined not to
respond to a call for revision talks. The roll call will most likely
be delayed until at least next week.

If the ruling parties railroad the bill, deliberations in the Upper
House, where the opposition camp has dominance, would
be rocky. As such, an increasing number of ruling party members are
becoming cautious about taking a committee vote this week.

Both camps agreed at a meeting of the Lower House Special Committee
on the evening of the 7th to hold a questioning session for two
hours on the morning of the 8th. However, whether to take a vote or
not has been left to Chairman Takashi Fukaya to decide. After the
meeting, Fukaya told reporters, "It will be difficult to take a vote
on the 8th as planned."

The government and the ruling camp are aware that the US strongly
hopes Japan will resume its fueling operations. They plan to hold
deliberations in the Upper House up to the evening of the 15th, when
the prime minister is scheduled to travel to the US. The prime
minister is also slated to take part in an East Asia summit to be
held in Singapore. Unless the questioning session in the Upper House
with the presence of the prime minister is completed before his
overseas travel, the period of time until he returns home on the
22nd would be wasted.

It is unclear how fiercely the opposition camp would react if the
ruling camp forced a vote on the bill. The prime minister and Ozawa
discussed the enactment of a permanent law for the overseas
dispatches of Self-Defense Forces (SDF) and new refueling
legislation as a package. The ruling parties hope that if they
manage to bring about policy talks with the DPJ, they might be able
to find a lead-in toward a breakthrough.

6) SDF dispatch law next year: Fukuda

YOMIURI (Page 4) (Abridged)
November 8, 2007

Prime Minister Fukuda yesterday attended a meeting of the House of
Representatives Special Committee on Antiterror Measures for
intensive discussions. In the meeting, Fukuda was asked about the
advisability of establishing a general or permanent law for Japan to
send the Self-Defense Forces on overseas missions. "It's easy to
talk about a general law," Fukuda stated before the committee.
"But," he went on, "it's quite difficult to decide." The premier
added, "At any rate, it will be next year or later." With this,
Fukuda indicated that he would do his best instead to get a
government-introduced new antiterror bill through the Diet for the
time being (in order for Japan to resume the Maritime Self-Defense
Force's refueling activities in the Indian Ocean).

7) Ozawa officially announces his decision to stay on; "I will stake
my political life on the next general election," says Ozawa,
dismissing a coalition and indicating return to confrontational
policy course

TOKYO 00005140 005 OF 012

ASAHI (Top play) (Abridged slightly)
November 8, 2007

Democratic Party of Japan (DPJ or Minshuto) President Ichiro Ozawa
at a joint meeting yesterday of DPJ members in both chambers
officially retracted his resignation as party head, saying: "I have
decided to stake my political life on the (next) general election.
By serving as party president once more, I would like to face the
final battle." In a press conference that followed, Ozawa indicated
a return to the confrontational policy course, dismissing holding
talks on a coalition before the (next) general election. Following
this, the government and the ruling parties started final
coordination for extending the current Diet session by about 35 days
until mid-December. The view is gaining ground that a new refueling
bill to resume the Self-Defense Forces' operation should be
readopted in the House of Representatives to enact it.

At the DPJ plenary meeting, Ozawa said: "I apologize for causing
tremendous trouble for the public and DPJ supporters over the
party-head talks." Based on his talks with Prime Minister Fukuda,
Ozawa explained why he had proposed a grand coalition to the party
leadership this way: "I thought that we would be able to realize
major policies by joining the administration and that chances would
grow for us to win (the next) general election by showing our
ability to hold the reins of government to the public."

Ozawa then announced that he would stake his political life on the
next general election, pledging to win it as party president. He
also revealed a plan to launch a Lower House election campaign
headquarters on Nov. 7 to make full-fledged efforts to build a solid
campaign system.

In the press conference that followed, he stressed that he had no
intention of bringing up the coalition concept before the next
general election, noting: "I will work hard for the (next) general
election without thinking of a coalition. Given a party consensus, I
will give my all and fight to the best of my ability in winning the
general election." He denied any possibility of holding talks with
Prime Minister Fukuda, saying, "Basically I don't think there will
be any such meeting in the future." He also reiterated his
opposition to the (new) refueling assistance special measures
legislation, noting, "Because basic views are different, meeting
(the other side) halfway will not be accepted."

Meanwhile, in the wake of the DPJ's production of its
counterproposal, the ruling camp in yesterday's meeting of the Lower
House Special Committee on Prevention of Terrorism called on the DPJ
for revision talks on the special measures legislation. The DPJ
refused the request. As a result, the government and ruling parties
decided to expedite Diet deliberations for enacting the special
measures legislation during the current session.

Although the government and ruling bloc put off their plan to take a
vote at the Lower House committee yesterday, they intend to extend
the Diet session beyond Nov. 10 to get the legislation passed
through the Lower House early next week. They are conducting
coordination to extend the session by about 35 days until
mid-December to secure enough time for deliberations in the Upper
House by envisaging readopting the legislation in the Lower House by
a two-thirds majority following rejection in the Upper House.


TOKYO 00005140 006 OF 012


Many in the government and ruling parties take the view that even if
the legislation is readopted in the Lower House, (the DPJ) does not
have the power to submit a censure motion against the prime minister
in the Upper House due to the Ozawa resignation fiasco. In the event
a censure motion is submitted, the government and the ruling camp
would make a final decision on readopting the legislation by
watching the DPJ's response while dangling the prospect of a Lower
House dissolution.

8) DPJ chief Ozawa reveals how an idea of forming a grand coalition
came about: "The idea was suggested by someone two months ago behind
the scenes"

MAINICHI (Page 2) (Full)
November 8, 2007

Kazuto Takeshima

At a press briefing yesterday, Democratic Party of Japan's (DPJ)
President Ichiro Ozawa explained about his recent meeting with Prime
Minister Yasuo Fukuda (president of the ruling Liberal Democratic
Party (LDP)). He also revealed in part how the idea of forming a
grand coalition with the LDP came about, telling reporters that
there had been a mediator, whose name Ozawa did not say, and that
this person had suggested to him two months or so ago that he form a
grand coalition with the LDP. On the question of who first brought
up the idea of a grand coalition at the party-heads meeting, what
the government and ruling bloc have so far explained does not agree
with the DPJ, but Ozawa admitted that the grand coalition idea did
not come up suddenly at the meeting.

Ozawa did not make clear who had been the "mediator," but a source
connected with the LDP yesterday pointed out: "The first mediator
would have been Tsuneo Watanabe, chairman and editor-in-chief of the
Yomiuri Shimbun."

Ozawa again objected to the claim by a source connected with the
government and the ruling parties that "It was Mr. Ozawa who took
the lead in discussing the grand coalition idea." Ozawa said, "So
far I've never revealed the contents of secret talks between
politicians. But under the circumstances, I will make it clear,"
giving an explanation about (how the grand coalition idea came
about).

According to Ozawa, he was invited by "someone," whose name he did
not reveal, to dine together. At the time, that "someone" suggested
forming a grand coalition for the sake of the country. Ozawa told
that "someone" that the mood in the DPJ is to stay closely united in
order to win the next Lower House election, following this summer's
Upper House election. He told the other person that "whether to
(form a grand coalition) is a matter the person in power (namely,
the prime minister) should bring up." Their meeting occurred around
the time when former Prime Minister Shinzo Abe announced his
intention to resign as prime minister.

In mid-October, that "someone" again contacted Ozawa and asked him
to meet a "proxy" for the prime minister, telling Ozawa that "The
prime minister, as well, is willing to form a grand coalition."
Ozawa met with the delegate at a certain place and that person told
Ozawa: "The prime minister is eager about forming a grand
coalition." Ozawa asked the person, "Are you serious about this
idea?" The person responded: "I, too, am serious." This meeting

TOKYO 00005140 007 OF 012


seemed to occur around when the Fukuda cabinet came into being. The
agent for the prime minister would have been a person who acted in
compliance with the prime minister. Ozawa did not reveal the name of
this person, either. Politicians who have favored the grand
coalition idea include former Prime Minister Yoshiro Mori, former
LDP Upper House Caucus Chairman Mikio Aoki, and former LDP Secretary
General Hidenao Nakagawa.

When asked about who suggested forming a grand coalition, Prime
Minister Fukuda said: "If both sides do not favor the idea of
forming a grand coalition, doing so is impossible. Both shared
similar feelings." Ozawa again denied the claim at the press
briefing that he brought up the idea of forming a grand coalition,
but he remained mum at the press briefing yesterday, as well, on
such questions as whether during the meeting, he had discussed
cabinet posts, leaving details about the grand coalition scheme
unclear.

9) Some DPJ members remain unhappy; Ozawa cannot afford to make
mistakes in managing political situation, party affairs

SANKEI (Page 3) (Full)
November 8, 2007

The Democratic Party of Japan (DPJ or Minshuto) during an informal
meeting of both Lower and Upper House members accepted President
Ozawa's apology for the furor over the announcement of his decision
to step down has caused and his decision to stay on as president.
The reality is, however, that many members backed down out of
necessity in view of Ozawa's election skills and concern that he
might leave the party, because the Lower House election is close at
hand, a mid-ranking member explained. Dissatisfaction among party
members has just quieted down on the surface. There is fear that if
Ozawa makes a blunder in the management of party affairs or in his
judgment of the political situation, criticism against him would
erupt, causing a serious fissure in the party.

The session held yesterday was expected to end without turmoil even
before it started. After Ozawa offered an apology, Supreme Advisor
Kozo Watanabe, who is known for his speaking skills, evoked
laughter, saying, "If you had listened to advice as seriously during
the Hosokawa cabinet, a two-party system would have been realized a
long time ago." When he said, "Let's turn the potential setback to
our advantage," many lawmakers applauded and smiled.

However, Deputy Secretary General Yoshito Sengoku, who keeps himself
at arm's distance from Ozawa, said, "There is a considerable gap
between the internal air of excitement (expectations of Ozawa) and
the feeling of the public," creating a feeling of tension at the
meeting.

Sengoku continued, "There have been cases in which policy
discussions were disrupted, when somebody said in an indirect
discourse that President Ozawa's view on this issue seems to be such
and such. Communication between Mr. Ozawa and party members is
superficial." He thus indicated his view that dissatisfaction with
Ozawa remains.

Vice President Hajime Ishii also said after the meeting, "It is only
natural that somebody would advance such a harsh opinion. Otherwise,
the party looks like some kind of cult." Several others also
indicated understanding of the criticism of Ozawa expressed by

TOKYO 00005140 008 OF 012


Sengoko, with Deputy President Seiji Maehara noting, "There had been
an atmosphere in the party in which Mr. Ozawa's opinion was the
final word" and Deputy President Katsuya Okada saying, "I want the
leadership to take Mr. Sengoku's opinion seriously."

Ozawa during a press conference held after the meeting stressed his
intention to oppose the new antiterrorism special measures bill
introduced by the government, by abandoning the idea of a grand
coalition and policy talks with the Liberal Democratic Party (LDP).
However, one mid-ranking member said, "If there has appeared a gap
with his words, we will approve an effort to remedy the situation as
we did this time."

The Japanese Communist Party, the Social Democratic Party and the
People's New Party, the DPJ's partners in the opposition coalition,
also criticized Ozawa, noting that it is illogical for the DPJ to
unconditionally dissuade Mr. Ozawa from resigning. The furor this
time will likely have a serious impact on the joint struggle by the
opposition.

JCP Chair Kazuo Shii criticized Ozawa, "Mr. Ozawa did not
categorically say that the grand coalition initiative was a
mistake." SDP head Mizuho Fukushima underscored, "There is no change
in the dangerous situation in which a permanent law could be
enacted."

10) Former US Defense Secretary Cohen: Moving away from ordinary
country is a mistake; Hopes for resumption of Japan's refueling
operation

YOMIURI (Page 2) (Full)
November 7, 2007

Visiting former US Secretary of Defense William Cohen gave an
interview to the Yomiuri Shimbun yesterday. In his interview in
Tokyo, citing such overseas activities conducted in recent years by
the Self-Defense Forces (SDF) as participation in the UN
peace-keeping operations and support for the Iraqi reconstruction,
Cohen said: "Japan has been becoming an ordinary country. It is
wrong to move away from that course." He expressed his hopes Japan
would resume the Maritime Self-Defense Force's refueling operation
in the Indian Ocean.

Cohen pointed out that the suspension of the MSDF refueling mission
has given Japanese political leaders a good opportunity to carry out
real debate on how Japan should contribute to the international
community. He then said: "Whether Japan can become a country that
can assume international responsibility is now being tested."

11) Futenma panel: Gov't explores common ground before Fukuda's US
visit; Tokyo, Okinawa still divergent

YOMIURI (Page 4) (Full)
November 8, 2007

The government resumed consultations yesterday for the first time in
10 months with Okinawa's prefectural and municipal governments,
including the city of Nago, over the pending issue of relocating the
US Marine Corps' Futenma Air Station in the island prefecture's
central city of Ginowan. In the meantime, Prime Minister Fukuda is
scheduled to make his first official visit to the United States in
mid-November. The government therefore judged that it would be

TOKYO 00005140 009 OF 012


necessary to make an appeal on its stance over the issue of Futenma
relocation before Fukuda's US visit. However, Okinawa's base-hosting
localities have been calling for the government to revise its
Futenma relocation plan. As it stands, Tokyo and Okinawa remain far
apart on the issue. It is still unclear whether the government can
find common ground with Okinawa.

On the issue of relocating Futenma airfield, the government plans to
lay down an alternative V-shaped pair of airstrips in a coastal area
of Camp Schwab, a US military base in Okinawa Prefecture's northern
coastal city of Nago. However, Okinawa Prefecture and Nago City have
been calling for the government to move the site of this newly
planned tarmac to an offshore area.

In yesterday's meeting, Okinawa Gov. Hirokazu Nakaima insisted on
the necessity of moving the relocation site to an offshore area.
Specifically, Nakaima cited the need to reduce aircraft noise as
well as to eliminate the risk of accidents. He also cited the need
to protect egg-laying sites for sea turtles as well as to protect
archeological properties. The government is now going through
procedures to assess the potential impact of Futenma relocation to
its site and environs. In this regard, Nakaima indicated that he
would ask the government to revise its Futenma relocation plan in
two stages. First, Nakaima suggested the need for the government to
move the relocation site to an offshore area at its own discretion
within the scope of its environmental assessment. Second, the
governor is expected to issue his statements over the government's
environmental assessment. In this process, the governor will ask the
government to move the relocation site to a farther offshore area.

According to the Okinawa prefectural government, the alternative
facility's site may be moved to the extent of up to about 56 meters
within the limits of environmental assessment. "I'm not asking too
much," Nakaima told a news conference after the meeting. However,
the government says it cannot revise the relocation plan. Okinawa
and the government agreed in yesterday's meeting to continue their
consultations. However, Chief Cabinet Secretary Machimura, who
presided over the meeting, indicated in a press conference after the
meeting that it would be difficult to revise the government plan
agreed on between the Japanese and US governments. "We can't change
it just because of Japan's circumstances," Machimura said.

12) Fuel supply correction reported to Ishiba, others: ex-MSDF
official

YOMIURI (Page 4) (Full)
November 8, 2007

The House of Representatives Special Committee on Antiterror
Measures held a closed-door meeting yesterday over the issue of
correcting the quantity of fuel supplied by a Maritime Self-Defense
Force supply ship in the Indian Ocean. In the meeting, Masayoshi
Teraoka, a former director of the Maritime Staff Office Plans and
Programs Division, disclosed that he had consulted with officials
above him on May 8, 2003 about the quantity of MSDF-supplied fuel.

In a news conference held that day, the then Joint Staff Council
chairman announced a mistaken amount of fuel supply. A reporter
there asked about the amount of fuel supply, saying, "It's small."
Teraoka reported this to then Defense Agency Director General Ishiba
and then Defense Policy Bureau Director General Takemasa Moriya,
according to one of those present in the meeting.

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13) Former executive of Yamada Corp. spend most of 9 million yen in
slush funds on entertaining Moriya, all funds now used up

ASAHI (Page 39) (Excerpts)
November 8, 2007

Motonobu Miyazaki, former executive of Yamada Corp., a company
specializing in military equipment, used slush funds pooled under
the pretext of remuneration for directors to treat former Vice
Defense Minister Takemasa Moriya to free rounds of golf, according
to sources familiar with the case. It was confirmed about five years
ago that the balance of slush funds in a bank account was
approximately 9 million yen. But it has been found that most of the
money had been used to entertain Moriya until all the funds were
used up this April. Miyazaki left the company and established Nihon
Mirise, a trading firm specialized in military equipment,. Even
afterward, Miyazaki was using the funds placed under the new
company's control to entertain Moriya, according the sources.

On suspicion of Miyazaki and others having illegally withdrawn about
100 million yen from a US subsidiary of Yamada Corp., the Tokyo
District Public Prosecutors Office's special investigation squad is
questioning them.

Yamada Corp. has long pooled funds disbursed under the pretext of
remuneration for Miyazaki and other executive directors in a bank
account. Its successive accountants reportedly have management the
funds.

The about 9 million yen in the bank account - confirmed five years
ago - were used mostly to entertain Moriya. When Miyazaki played
golf with Moriya and his wife and dined with them after golf, he
paid the bills, including those for himself, with the slush funds.
The amount paid by Moriya as expense for golf was always 10,000 yen,
even when his wife played with them.

14) Finance Minister Nukaga denies in Lower House allegation he
received one million yen in carfare

ASAHI (Page 39) (Slightly abridged)
November 8, 2007

In a meeting of the House of Representatives special antiterrorism
committee yesterday, Finance Minister Nukaga denied an allegation
that he had received one million yen from Motonobu Miyazaki, former
executive of Yamada Yoko Corp., a trading firm specializing in
military equipment, as carfare when he attended a wedding reception
in the fall of 2005. He replied to a question by Democratic Party of
Japan member Hiroshi Kawauchi: "I returned the 200,000 yen I
received as carfare to Miyazaki as congratulations money."

Nukaga said: "It is true that Mr. Miyazaki left carfare when he
brought an invitation card. About 200,000 yen was in the envelope."
Since he assumed the post of Defense Agency director general after
that, his wife attended the reception on behalf of him. Nukaga said
that he had returned the carfare money to Miyazaki as
congratulations money.

15) Ambassador to Indonesia Ebihara to become vice foreign minister

NIKKEI (Page 2) (Full)

TOKYO 00005140 011 OF 012


November 8, 2007

Foreign Minister Koumura approved yesterday of the honorable
retirement of Administrative Vice Foreign Minister Shotaro Yachi,
63, in January next year, and decided to appoint Ambassador to
Indonesia Shin Ebihara to be Yachi's successor as vice minister.
Ebihara's appointment will be decided in a cabinet meeting by early
January after obtaining approval in a meeting at the Prime
Minister's Office.

Shin Ebihara left the University of Tokyo in mid-course in 1971 and
entered the Ministry of Foreign Affairs. He has been serving as
ambassador to Indonesia since March 2006, after serving in the post
of assistant deputy chief cabinet secretary. He hails from Tokyo. He
is 59 years old.

16) US bipartisan group of foreign affairs and security experts
suggests: "Relations with China are of vital importance"

SANKEI (Page 6) (Full)
November 8, 2007

Takashi Arimoto, Washington

A bipartisan group of foreign affairs and security experts,
including former Deputy Secretary of State Armitage and former
Assistant Secretary of Defense Nye, on Nov. 6 finalized a set of
proposals for the United States' future foreign policy strategy.
Regarding China, the proposals say: "In terms of world security and
prosperity, US-China relations are of vital importance." They
insisted that the US and China, instead of coming into collision,
should work together in such areas as energy, security, the
environment, and prevention of weapons of mass destruction.

The proposals note that while the US was busy with dealing with the
Middle East issue, China "skillfully filled the vacuum," citing that
China has been actively engaged in multilateral political and
security frameworks, for instance, the ASEAN Regional Forum (ARF)
and the ASEAN plus three.

As China's intentions, the proposals give this analysis: "China did
so in pursuit of economic interests, but China may be pursuing a
long strategy of growing into a global power instead of a regional
power."

On the Japan-US alliance, the proposals note that "It has been
strengthened over the past seven years," and appreciated it, noting,
"Multifaceted relations are continuing." As for US-ROK relations,
the proposals note that "Most South Korean people are aware of the
importance of the bilateral alliance," adding that they are
irritated by their country's dependence on the US in the security
area and they are seeking to improve the current relations to the
relations of equality.

Envisioning next year's presidential election, the proposals cite
the tasks the US needs to address in the future include: (1) the US
should fight the threat of terrorism but should not overreact; (2)
the US should close its Guantanamo Bay Naval Base's prison for
alleged terrorists in Cuba in order not to give the impression that
the Americans are intolerant and injustice; and (3) the US should
demonstrate its diplomatic power, for instance, by acting as a
mediator to bring peace to the Middle East.

TOKYO 00005140 012 OF 012

SCHIEFFER

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