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Cablegate: Japanese Morning Press Highlights 11/15/07

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UNCLAS SECTION 01 OF 09 TOKYO 005240

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 11/15/07


Index:

Prime Minister Fukuda off to US today:
1) Prime Minister Fukuda, leaving for Washington today, has a cold,
worries aides (Asahi)
2) Prime Minister Fukuda to stay in US for 26 hours (Yomiuri)

Agenda for Bush-Fukuda talks:
3) Prime Minister Fukuda to tell President Bush tomorrow that Japan
is opposed to delisting North Korea as terror sponsor (Sankei)
4) Prime Minister Fukuda to reaffirm rocksolid alliance with
President Bush (Mainichi)
5) Japan to ask US for cooperation on post-Kyoto scheme to deal with
global warming (Sankei)

North Korea, China issues:
6) State Dept. denies links between North Korea delisting,
abductions (Sankei)
7) Upper chamber OKs extending North Korea sanctions (Asahi)
8) Japan, China may hold foreign ministerial late this month over
East China Sea gas exploitation (Sankei)

Diet affairs:
9) Opposition-controlled upper chamber to fast-track Iraq pullout
bill, backburner MSDF refueling bill (Asahi)
10) Ruling, opposition parties get nowhere on new antiterror
legislation (Yomiuri)
11) DPJ limits SDF Afghan role to civilian assistance only (Tokyo
Shimbun)

Fallout from MOD scandals:
12) Ex-Yamada Corp. exec balked investigation into bill-padding
(Tokyo Shimbun)
13) Ex-MOD Vice Minister Moriya to be summoned to Diet today again
as sworn witness (Tokyo Shimbun)
14) Yamada Corp. raised slush funds for PKO procurement, sent money
from Israel to US (Asahi)

Defense & security issues:
15) MSDF squadron to return home from Indian Ocean on Nov. 23 (Tokyo
Shimbun)
16) USFJ workers poised to go on strike against GOJ-planned wage
cuts (Sankei)

Articles:

1) Prime Minister Fukuda's cold getting aides into fuss prior to
visit to US

ASAHI (Page 4) (Full)
November 15, 2007

Prime Minister Yasuo Fukuda has been ill with a cold this week. He
delivered speeches in meetings with an inaudible voice. He said:
"Since I haven't a fever, I will be getting better soon." Prior to
his first official trip to the United State as prime minister,
Fukuda's aides are concerned.

"I can't speak," Fukuda said yesterday in a meeting of the governors
across the nation. He then cracked a joke, "I usually speak with a
nice voice." Participants were unable to hear some of his speech.


TOKYO 00005240 002 OF 009


On Nov. 12 in a Diet session, Fukuda responded to questions while
sniffling. He put off a planned interview on the 13th with foreign
correspondents. He returned to his residence after wrapping up a
meeting after only 15 minutes. Fukuda reportedly told his aides, "I
won't be able to carry out the summit (with the US president) as is.
I will clear up my cold before leaving for the US."

2) Prime Minister Fukuda to stay only 26 hours in Washington --
first official overseas trip after taking office

YOMIURI (Page 4) (Full)
November 15, 2007

A schedule for Prime Minister Yasuo Fukuda's first official overseas
travel to the United State and Singapore has now been set. In
Singapore, Fukuda will hold talks with his Chinese counterpart and
the South Korean president.

Fukuda is going to leave Japan this afternoon and hold his first
summit with US President George W. Bush on the morning of Nov. 16.
The two top leaders will then hold a joint press conference. After
offering flowers at Arlington National Cemetery, he will hold an
informal discussion with American experts. He is expected to leave
Washington on the afternoon of the 16th and return home on the
afternoon of the 17th.

Fukuda plans to leave for Singapore on the afternoon of the 19th and
attend the summit of the Association of Southeast Asian Nations,
Japan, China and South Korea (ASEAN and Plus 3). He is expected to
hold his summit with the South Korean president. He will attend an
East Asia summit on the 21st. He will return home on the morning of
the 22nd after meeting Japanese and foreign correspondents in
Singapore.

The prime minister initially planned to fly to Singapore from the
United States, but he has decided to return home due to the Diet
schedule. Therefore, he will stay in Washington only 26 hours.

3) Prime minister to express opposition to US delisting plan in
meeting with President Bush

SANKEI (Page 3) (Full)
November 15, 2007

The United States is now considering the possibility of delisting
North Korea as a state sponsor of terrorism. Prime Minister Yasuo
Fukuda decided yesterday to express his opposition to this possible
plan during a meeting with President Bush scheduled for Nov. 16 in
Washington.

In the summit, Fukuda intends to refer to the fact there has been no
progress on the issue of Japanese nationals abducted by North Korea
and ask the US government to put off its delisting plan, saying: "If
the US removes the North from the list despite no progress made on
the abduction issue, there may be a serious impact on the Japanese
people's feelings and Japan-US relations."

Asked by reporters at his official residence last evening for his
comment on State Department spokesman Casey's remarks, Prime
Minister Fukuda replied: "When considering the importance of
Japan-US relations, we cannot take this one portion (of Casey's
remarks) as encompassing the US government's view. The US also

TOKYO 00005240 003 OF 009


should hand down a comprehensive judgment." He raised questions
about the idea of dealing with the process of removing the North
from the blacklist separately from the abduction issue.

4) Prime Minister Fukuda to leave for US today: Japan-US summit
tomorrow; Strength of bilateral alliance to be reconfirmed

MAINICHI (Page 2) (Full)
November 15, 2007

Prime Minister Yasuo Fukuda will leave for the US today and meet
with President Bush tomorrow (local time). This will be his first
foreign trip since taking office as prime minister. The prime
minister during the upcoming talks with Bush will clarify his
administration's diplomatic stance, by playing up synergy of
strengthening the Japan-US alliance and promoting Asia diplomacy.

He will also explain a situation in which the new antiterror special
measures bill cleared the Lower House. He will express his
determination to do his utmost with the possibility of approving the
bill again in the Lower House, even if it is rejected in the Upper
House.

There is a growing possibility of the US taking off North Korea from
its list of state sponsors of terrorism within the year. In this
connection, Fukuda will work on Bush to set a settlement of the
abduction issue as a precondition. He intends to call for a cautious
response from the US side in the belief that if it removes North
Korea from its blacklist without progress on the abduction issue, it
could have a negative impact on bilateral relations.

5) Post-Kyoto Protocol: Prime minister to seek cooperation from US
at bilateral summit; Will propose new working group plan

SANKEI (Page 8) (Excerpts)
November 15, 2007

The government yesterday revealed a plan for Prime Minister Yasuo
Fukuda during his meeting with President Bush, which is to take
place on Nov. 16, to bring up the global warming issue and seek
cooperation for a proposal for creating a framework after the Kyoto
Protocol expires in 2013. He intends to obtain US support for
Japan's proposal for establishing a working group responsible for
negotiations, instead of just dialogue, within the UN framework.

Japan's aim is to take the lead in discussions on setting up a new
working group involving the US prior to the 13th session of the
Conference of the Parties to United Nations Framework Convention on
Climate Change (COP13) to be held on Bali, Indonesia, in early
December.

Unless global warming prevention negotiations involve the US, which
opted out of the Kyoto Protocol, and China and India, which have no
obligation to cut greenhouse gas emissions, it would be impossible
to produce global-scale results. As such, Japan has readied a
proposal that it is necessary to set up a working group joined by
major emitters. Environment Minister Ichiro Kamoshita at a
ministerial-level preparatory meeting for the COP13 and the third
meeting of the Parties to the Kyoto Protocol (MOP3) held in Bogor,
Indonesia revealed the proposal.

Following the move, the Japanese government has judged that it would

TOKYO 00005240 004 OF 009


be important in taking the initiative in the Bali meeting for Japan
to officially obtain during the summit obtain US approval on the
establishment of a working group.

President Bush is active in creating a post-Kyoto Protocol
framework, as can be seen in the fact that he hosted an
international conference on the global warming issue in September.

However, Bush remains opposed to the idea of restricting emissions
in a forceful manner. He instead insists on emissions cuts under
conditions that do not hamper economic growth. As such, it is
unclear whether the US will give clear-cut approval to the proposal
for setting up a working group as a post-Kyoto framework for
negotiations.

6) US State Department: North Korea's status as terrorism-sponsoring
nation not linked to abduction issue

SANKEI (Page 3) (Full)
November 15, 2007

Takashi Arimoto, Washington

State Department spokesman Tom Casey said in a press briefing on
Nov. 13 that the issue of delisting North Korea as a state sponsor
of terrorism and the issue of North Korea's past abductions of
Japanese nationals are not necessarily linked. The spokesman
indicated that the US would push forward the process of taking the
North off a US blacklist without linking it to resolving the
abduction issue. Under US domestic law, the president is required to
inform the Congress of a plan to remove a country from the list at
least 45 days before the plan comes into effect. If North Korea
disables its nuclear facilities and declares all its
nuclear-development programs by the end of this year in accordance
with a six-party deal, the US will decide to delist it later this
year and will put the plan into effect in mid-February.

But the spokesman, taking Japan's position into consideration, said:
"There must be progress (on the abduction issue) in moving the
six-party process forward." He indicated that the US would continue
to give priority to resolving the abduction issue.

Former US Ambassador to the United Nations John Bolton, who is
opposed to delisting North Korea, met on Nov. 13 with visiting
representatives of the Association of the Families of Victims
Kidnapped by North Korea, a group of Diet members dealing with the
abduction issue, and the National Association for the Rescue of
Japanese Kidnapped by North Korea. In the meeting, Bolton stressed
the need for Prime Minister Yasuo Fukuda to convey to President Bush
in their meeting on Nov. 16 Japan's unwavering priority to the
abduction issue, saying: "The State Department is very eager to
remove North Korea from the list, so I want to get an opportunity to
thwart its plan."

7) Upper House approves extension of sanctions on North Korea; JCP,
SDP oppose it

ASAHI (Page 4) (Full)
November 15, 2007

The House of Councillors plenary session agreed yesterday to
re-extend until next April Japan's independent sanctions on North

TOKYO 00005240 005 OF 009


Korea. The sanction measures include a ban on North Korean ships
from calling at Japanese ports, as well as imports of North Korean
products. The sanctions were unanimously approved twice last October
when the measures were evoked and in April this year, but this time
the Japanese Communist Party, the Social Democratic Party and some
independent lawmakers were against the extension. The JCP explained
that there appears to be a new situation over the nuclear issue.

8) Japan-China talks on development of gas fields end in rupture:
Foreign ministerial possible in late November

SANKEI (Page 5) (Full)
November 15, 2007

The governments of Japan and China yesterday held a
bureau-director-level meeting in Tokyo to discuss development of gas
fields in the East China Sea. However, both sides remained at odds
over areas subject to joint development. The Japanese side proposed
to hold a meeting again within the month. The two countries during
the meeting agreed to hold a ministerial-level meeting, such as a
foreign ministerial, as needed. The Japanese government is
considering dispatching Foreign Minister Koumura to China to urge
the Chinese side to make a political decision.

They during the summit in April agreed to report on concrete
measures for joint development to their own top leaders. However, it
is now difficult to reach a settlement before the deadline. Chief
Cabinet Secretary Nobutaka Machimura during a press conference
yesterday expressed concern, "If we remain unable to compile any
good report, it might affect Prime Minister Fukuda's plan to visit
China."

In the past talks, the Japanese side has proposed that an area
straddling the Japan-China median line, which includes the Shirakaba
(Chunxiao in Chinese) gas field, which China is already developing
on its own, be subject to joint development, while the Chinese side
has suggested two areas on the Japanese side of the median line.

9) Ruling camp, DPJ agree to discuss DPJ bill to abolish Iraq Law
first in Upper House

ASAHI (Page 4) (Excerpt)
November 15, 2007

The ruling and the Democratic Party of Japan (DPJ) agreed in a
meeting of the House of Councillors' foreign and defense committees
yesterday to deliberate on the DPJ-presented bill to abolish the
Iraq Special Measures Law on a priority basis. Deliberations on the
government's new antiterrorism bill to resume the Maritime
Self-Defense Force's (MSDF) refueling mission in the Indian Ocean
will be delayed. The ruling coalition is against the DPJ bill
designed to pull SDF personnel out of Iraq, but it intends to urge
the DPJ to take a swift vote on the bill with the aim of starting
deliberations on the new antiterrorism bill at an early date.
Although it is certain that the bill will be rejected in the House
of Representatives, the ruling camp will unprecedentedly back the
passage of the bill that it is opposed to.

10) Ruling, opposition parties reach no conclusion on new antiterror
bill

YOMIURI (Page 4) (Abridged)

TOKYO 00005240 006 OF 009


November 15, 2007

The ruling Liberal Democratic Party and the leading opposition
Democratic Party of Japan (Minshuto) held a meeting of their House
of Councillors Diet affairs committee chairmen in the Diet yesterday
afternoon to discuss a schedule for deliberations on a
government-introduced new antiterror bill sent from the House of
Representatives to the House of Councillors. In the meeting, the LDP
and DPJ Diet affairs chiefs in the Diet's upper chamber, Seiji
Suzuki and Susumu Yanase, agreed to refer to the House of
Councillors Foreign Affairs and Defense Committee a DPJ-proposed
bill repealing the Iraq Reconstruction and Assistance Special
Measures Law. The DPJ had called for the ruling coalition to
fast-track the Iraq bill over the new antiterror legislation. The
committee will now first deliberate on the Iraq bill.

11) DPJ approves Afghan assistance draft bill allowing SDF to
provide only civilian assistance

TOKYO SHIMBUN (Page 2) (Full)
November 15, 2007

The main opposition Democratic Party of Japan (DPJ or Minshuto)
approved in a meeting yesterday of its Foreign Affairs and Defense
Division a special measures draft bill to support reconstruction of
Afghanistan as its counterproposal to the government's new
antiterrorism special measures legislation. The draft features
dispatch of the Self-Defense Forces (SDF) to Afghanistan only for
the purpose of extending civilian assistance. The DPJ will formally
make a final decision in a meeting on Nov. 21 of the "Next Cabinet."
It will determine whether to submit the bill to the current Diet
session after watching the Diet situation.

The bill is temporary legislation with a one-year life span. The
draft stipulates that SDF troops would support Afghanistan's efforts
to revitalize farm land, and provide medical and food aid in areas
where damage has not been inflicted on the civilians. A basic plan
for the SDF overseas dispatch requires prior Diet approval. The
draft does not refer to SDF participation in the International
Security Assistance Force (ISAF), which is party head Ichiro Ozawa's
pet argument.

The government's new antiterrorism bill stipulates that the SDF
would be allowed to use arms only to protect themselves or those
under their control. The DPJ's draft bill expands the standards for
the SDF's use of arms, stipulating that the SDF would be allowed to
use force when they need to prevent resistance toward their
activities at any cost.

Regarding participation in the Maritime Interdiction Operation,
including refueling activities, the draft stipulates that if
operations are authorized by the United Nations, necessary legal
adjustments would be looked into. The draft also mentions the need
for an early establishment of a permanent law enabling SDF overseas
deployment as needed.

12) Former Yamada executive impeded Defense Agency's investigation
of bill-padding case; Yamada briefed Moriya on the matter;
Administrative punishment not imposed

TOKYO SHIMBUN (Page 1) (Abridged)
November 15, 2007

TOKYO 00005240 007 OF 009

It has come to light that the defense equipment trading house Yamada
Corp. has padded a bill for defense equipment. In this connection,
former Yamada executive Motonobu Miyazaki, 69, under arrest on
suspicion of corporate embezzlement, is suspected to have had a
foreign acquaintance act as a manufacturer representative
responsible for the matter to offer an explanation to put Yamada at
an advantage when the then Defense Agency sent personnel to the
United States for investigations in 2002, sources familiar with the
matter said.

Yamada explained the past developments to former Vice Defense
Minister Takemasa Moriya, 63, who was serving as Defense Policy
Bureau director general, a post not responsible for the procurement
of equipment.

The special investigation squad of the Tokyo District Public
Prosecutors Office on Nov. 13 began seriously questioning Defense
Ministry officials responsible for equipment and former defense
officials, suspecting that (the Defense Agency) gave favors to
(Yamada) in return for entertainment.

Yamada padded the bill for the contract concluded with the Defense
Agency in March 2001 to deliver 24 sets of chaff and flare
dispensers (worth about 810 million yen).

A Defense Agency official stationed in the United States realized in
December 2001, after the contract was concluded, that the unit price
was higher than the same equipment on a different contract. The
official then asked the manufacturer, BAE Systems of Britain, and
Yamada about the matter and found that the bill was padded.

The Defense Agency sent an official to the United States in May 2002
to investigate the overcharge. Miyazaki blocked the defense official
from seeing a BAE representative.

Miyazaki specifically made his acquaintance working at a US
corporation closely associated with BAE act as a BAE executive to
offer an explanation that would put Yamada at an advantage,
according to the sources. Miyazaki is suspected to have forged
business cards.

Yamada subsequently proposed to the Defense Agency that it would
reduce the amount by 180 million yen and the contract was altered
accordingly. Yamada did not receive any administrative punishment
from the Defense Agency.

13) Moriya's second testimony today

TOKYO SHIMBUN (Page 1) (Full)
November 15, 2007

Former Administrative Vice-Defense Minister Takemasa Moriya, 63, who
was treated to free rounds of golf and wining and dining by Motonobu
Miyazaki, a former managing director of the Tokyo-based defense
equipment trading house Yamada Corp., will testify this afternoon
before the House of Councillors Foreign Affairs and Defense
Committee.

The focus will be on how Moriya will testify about allegations that
he gave favors to Miyazaki over the procurement of engines for the
Air Self-Defense Force's next-generation transport aircraft

TOKYO 00005240 008 OF 009


codenamed CX and allegations that he entrusted over 40 million yen
to Defense Policy Division Director Nobuki Kawamura, 47, who was his
subordinate.

In his testimony on Oct. 29 before the House of Representatives
Special Committee on Prevention of Terrorism, Moriya admitted that
he had been treated by Miyazaki to golf more than 200 times through
April 2007. At the same time, he flatly denied allegations that he
had given favors to (Yamada) on the procurement of defense
equipment.

Yamada President Yoshihiko Yonezu, 70, will also testify this
morning as an unsworn witness.

14) Yamada made 30 million yen in slush funds from procurement of
PKO supplies; Money sent from Israel to US

ASAHI (Page 1) (Abridged)
November 15, 2007

Osamu Akiyama, 70, former president of Yamada Corp.'s US subsidy who
is under arrest on suspicion of corporate embezzlement, built up a
slush fund of 30 million yen -- profit from the procurement of
supplies in connection with UN peacekeeping operations in the Middle
East -- by means of transferring it to the United States from the
office in Israel, sources familiar with the matter said. The special
investigation squad of the Tokyo District Public Prosecutors Office
has questioned an executive of the office and others on a voluntary
basis.

The money is suspected to have been transferred to Japan and was
used by former Yamada executive Motonobu Miyazaki, 69, for
entertaining former Administrative Vice-Defense Minister Takemasa
Moriya, 63.

Yamada President Yoshihiko Yonezu and Moriya are scheduled to
testify today before the House of Councillors Foreign Affairs and
Defense Committee. How the slush funds were created and how Moriya
was entertained are likely to draw attention.

According to Yamada sources and others, the Israel office (in Tel
Aviv) of Yamada International Corp. (YIC), Yamada's US subsidiary,
undertook work to procure daily necessities, such as food, cookers,
and bathtubs, since 1996 when the Self-Defense Force started PKO on
the Golan Heights. The payments were made by the local SDF unit in
US dollars.

The Israel office, upon receiving orders from former president
Akiyama, sent the money, some enclosed in the mail, to Akiyama, who
was based in New York at the time. Office executives occasionally
took cash with them when they visited the United States. They
transferred several million yen annually, for a total of about 30
million yen by around 2002.

Akiyama reportedly pooled the money he received in a secret bank
account for a slush fund. The slush fund was suspected to have been
sent to Japan and was used by Miyazaki for entertaining Moriya and
other defense officials.

The YIC started building up slush funds about 30 years ago on the
pretext of executive remuneration. The company reportedly had over
500 million yen in slush funds.

TOKYO 00005240 009 OF 009

15) MSDF ships to return home from refueling mission on Nov. 23

TOKYO (Page 2) (Full)
November 15, 2007

A squadron of Maritime Self-Defense Force vessels engaged in
refueling activities in the Indian Ocean will return to Japan on the
morning of Nov. 23, a high-ranking government official revealed
yesterday evening. The government plans to hold a ceremony that day
to greet the MSDF vessels, with Defense Minister Shigeru Ishiba and
others attending. The MSDF ships withdrew from there at midnight on
Nov. 2 along with the Antiterrorism Special Measures Law's Nov. 1
expiry.

16) Labor union of Japanese workers for US military bases set to
stage strike against wage cuts

SANKEI (Page 5) (Excerpts)
November 15, 2007

The government is considering cutting its host-nation budget (the
so-called sympathy budget) for the stationing of US forces in Japan
in next fiscal year's budget. In response, the All Japan Garrison
Forces Labor Union (Zenchuro), composed of Japanese employed on US
military bases and chaired by Kazuo Yamakawa, notified the Defense
Ministry yesterday of its plan to go on a four-hour strike on Nov.
21 in protest against wage cuts. If actually staged, it will be the
first strike by Zenchuro in 16 years.

The Defense Ministry and the Finance Ministry plan to cut Japanese
workers' wages by approximately 10 billion yen.

Wages and allowances for Japanese workers are paid from
sympathy-budget-based contracts with the Defense Ministry. The
Finance Ministry is calling for abolishing a 10 PERCENT
differential added to base pay for Japanese employees and language
allowances, as well as lowering retirement allowances to the level
of those for national public servants. Negotiations between
Washington and Tokyo over sympathy budget cuts are having
rough-going.

DONOVAN

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