Cablegate: Daily Summary of Japanese Press 11/27/07

DE RUEHKO #5345/01 3310759
P 270759Z NOV 07





E.O. 12958: N/A



(1) LDP Secretary General Ibuki: DPJ investigation likely mistaken
about Nukaga attending party

(2) Fukuda explicitly says that Finance Minister Nukaga will stay on
in office

(3) Iwakuni wavering over its rejection to USFJ realignment 4
(4) US military firms in Japan, too

(5) Yamada Corp. asked defense lobby for favors over discontinued

(6) LDP's coordination of candidates for new Lower House election:
North wind blowing against "Koizumi's children"

(7) Prime minister puts on hold test-drilling of gas-fields in East
China Sea, out of consideration to China

(8) Matsushita to mass-produce consumer fuel cells next fiscal year
as CO2 emission-cut measure




(1) LDP Secretary General Ibuki: DPJ investigation likely mistaken
about Nukaga attending party

November 27, 2007

The Liberal Democratic Party (LDP) this afternoon released the
results of its own investigation of the allegation in testimony by
former Vice Defense Minister Moriya that Finance Minister Nukaga
attended a dinner party hosted by the former executive director of
Yamada Corp., a trading firm specializing in aircraft and defense
procurement. The statement concluded: "There is a high probability
that the Democratic Party of Japan's (DPJ) investigation was

Prior to the release, LDP Secretary General Ibuki at a press
conference this morning revealed the outline of the investigation.
Regarding the evening of Dec. 4, 2006, which the DPJ indicated to be
the date of the party, he explained that the party's investigation
had found out: 1) Nukaga had a dinner meeting at a hotel that
evening and took a group photograph with the date and time inserted
on it; and 2) there was a recorded tape of the security-related
study group meeting he attended after the dinner. Ibuki added: "No
matter how you consider it, it is our sentiment that there would not
have been any free time for Mr. Nukaga to have attended the meeting
at the Japanese restaurant Hamadaya (as the DPJ asserted)." He took
the view that most likely the DPJ was mistaken in its

In addition, regarding the DPJ and other opposition parties' request
that Nukaga be summoned as a sworn witness before the House of
Councillors' Fiscal and Financial Affairs Committee, Ibuki stated:
"Since the name of the person who presented (the DPJ) with the

TOKYO 00005345 002 OF 011

information that (Mr. Nukaga) was present at the dinner party that
day is unclear, it would lead to invalid questions being asked (in
the committee hearing)." He asked the DPJ to disclose proof that
Nukaga was indeed at the dinner party.

(2) Fukuda explicitly says that Finance Minister Nukaga will stay on
in office

SANKEI (Page 3) (Abridged slightly)
November 27, 2007

LDP fights back, saying that Nukaga has "alibi"

Allegations have surfaced that Finance Minister Fukushiro Nukaga had
attended a dinner party along with former Administrative
Vice-Defense Minister Takemasa Moriya and others. Prime Minister
Yasuo Fukuda indicated in yesterday's House of Councillors plenary
session that his presence at the dinner did not pose any problem,
saying, "He has politely explained the matter at press conferences
and committee meetings," adding, "I want Mr. Nukaga to continue
making utmost efforts to compile the fiscal 2008 budget."

Nukaga, too, dismissed the suspicion at the plenary session, saying:
"Although I have exchanged words with corporate executives at a New
Year's party held by Keidanren (Japan Federation of Economic
Organizations) and other occasions during my tenure as Defense
Agency chief, I have never given anyone a special favor."

Chief Cabinet Secretary Nobutaka Machimura also told a press
conference yesterday afternoon: "I believe Mr. Nukaga has explained
matters correctly based on facts. Are there any concrete grounds for
the allegations?"

Meanwhile, opposition party Diet affairs chiefs met yesterday in the
Diet building and decided to demand that Nukaga and Moriya testify
under oath before the Upper House Financial Affairs Committee. At a
meeting of directors of the Upper House Financial Affairs Committee
that followed, the opposition camp sought testimonies by Nukaga and
others, but the ruling block rejected it. The two camps are now
scheduled to discuss the matter on Nov. 27.

LDP leadership thinks groundless accusation will turn into another
"e-mail fiasco"

Following Prime Minister Fukuda's clear indication to retain Nukaga,
the Liberal Democratic Party has staged a fight-back.

The LDP leadership has reportedly obtained hard evidence to prove
that Nukaga was not present at the dinner. A senior LDP member
wishfully said: "This is going to be another fake email fiasco
involving former Democratic Party of Japan lawmaker Hisayasu Nagata,
who lost his Diet seat because of it." Contrary to such a comment,
LDP lawmakers seem highly irritated by the Nukaga problem. Unable to
dispel suspicions, Nukaga now finds himself in a storm of criticism
from within the party.

LDP Secretary General Bunmei Ibuki received on Nov. 25 a telephone
call from Nukaga from the city of Akita. Visibly frustrated, Ibuki
told the finance minister: "If you have hard evidence, you should
say so at places like a press conference. You should consult with
Diet Affairs Committee Chairman (Tadamori) Oshima."

TOKYO 00005345 003 OF 011

Allegations have emerged that Nukaga was present, along with Moriya
and Motonobu Miyazaki, a former managing director of defense
equipment trading house Yamada Corp., at a dinner party held on
December 4, 2006, at the Hamadaya Japanese restaurant in Tokyo's
Ningyocho district in honor of former US Department of Defense Japan
Division Director James Auer. The DPJ grilled Nukaga by even
producing the dinner seating arrangement.

Nukaga has repeatedly brushed aside the allegations by simply
saying: "There is no evidence (that I attended the dinner party). I
have no recollection of it, either." Unable to remain silent
observers, Ibuki and others seem to have concluded that the matter
could no longer be left to Nukaga alone.

The Nukaga issue cropped up in a government and ruling coalition
liaison meeting held yesterday noon, with prime ministerial aides
also calling for speedy measures. Nukaga reportedly presented the
LDP leadership with evidence proving that he was attending a
different study meeting that day.

Following this, LDP Senior Deputy Secretary General Hiroyuki Hosoda
told a press conference yesterday: "(The DPJ) must restore Mr.
Nukaga's honor by correcting false information and statements that
went too far." Ibuki, too, applied pressure on the opposition camp,
saying, "Persons who posed the wrong questions must be summoned to
testify at the Diet."

Nukaga quit as Defense Agency chief in 1998 to take responsibility
for a scandal involving breach of trust cases against the agency and
as state minister in charge of economic and fiscal affairs in 2001
in the wake of allegations regarding his receipt of money from
mutual aid foundation KSD. Aware of such background of Nukaga, some
in the ruling camp are voicing concern if he can get through
deliberations on the fiscal 2008 budget as finance minister.

DPJ eyes Nukaga's sworn testimony to settle the matter

In the face of the LDP's enhanced efforts to turn around the
situation, the DPJ has not given the slightest indication of
relaxing its pursuit of the Nukaga case. In yesterday's meeting of
the Diet affairs chiefs of four opposition parties, the DPJ proposed
sworn testimonies by Nukaga and Moriya before the Upper House
Financial Affairs Committee.

DPJ President Ichiro Ozawa yesterday took this view in the city of
Nagasaki: "(Mr. Nukaga) is in a position to formulate the budget as
finance minister. If he has nothing to hide, he should say so fairly
and squarely." Deputy President Naoto Kan, too, cynically said in
the city of Maebashi: "We would like to see Mr. Nukaga dispel
suspicions through his Diet testimony. We will be happy to provide
him with a chance to do so."

The DPJ, however, has yet to produce any conclusive evidence that
Nukaga attended the dinner party on December 4, 2006.

Former DPJ Lower House member Hisayasu Nagata last spring brought up
a bogus email at the Diet based on uncertain information which
eventually cost him and Seiji Maehara a Diet seat and DPJ
presidency, respectively.

In yesterday's meeting of Diet affairs chiefs of the opposition
parties, there was a scene where members of other parties asked the

TOKYO 00005345 004 OF 011

DPJ representatives to make sure that the allegations are true.

In response to the observation in the ruling bloc that the Nukaga
case would escalate into another e-mail fiasco, DPJ Diet Affairs
Committee Chairman Kenji Yamaoka defiantly said to reporters
yesterday: "They lack awareness. We are asking for 'yes' or 'no' to
our proposal for Diet testimony (by Nukaga). The nature is totally

(3) Iwakuni wavering over its rejection to USFJ realignment

ASAHI (Page 37) (Abridged)
November 23, 2007

In the process of realigning US forces in Japan to mitigate
Okinawa's burden of hosting US military bases, the government is
urging base-hosting municipalities in the nation to accept more
burdens with carrots and sticks. However, local base hosts are
wavering over such a way of doing things. The city of Iwakuni in
Yamaguchi Prefecture is opposed to the planned transfer of
carrier-borne aircraft to Iwakuni base. Iwakuni is now constructing
a new municipal government office building. Meanwhile, the
government has stopped its subsidy for the city's new office
building project. Consequently, the city's municipal administration
is in turmoil. The government decided yesterday on incentives as
carrots for localities accepting realignment plans.

The city hall of Iwakuni is located in the downtown area. Right next
to it, the city's new office building, which is covered with blue
sheets, is under construction. The new office building is expected
to be completed at the end of the current fiscal year. However, the
city has yet to make up for the government's discontinued subsidy of
3.5 billion yen for the current fiscal year.

"We have cooperated with the base. However, the government has been
too hard on us. We don't know why. The government is pushing for
realignment with carrots and sticks. We can't agree to such a way of
doing things." So saying, Iwakuni Mayor Katsusuke Ihara displayed
bitterness in a press conference on Nov. 16. Earlier in that day,
the city's municipal assembly met for an ad hoc session to take a
fourth vote on the municipal government's budget plan to raise funds
with special bonds for the city as a newly consolidated local public
entity of municipalities, instead of counting on subsidies from the
state coffers. The budget plan, however, was voted down.

Iwakuni City's municipal assembly is dominated by those in favor of
accepting carrier-borne aircraft to the base for the government's
subsidy. In the city's assembly, pro- and anti-realignment members
are squaring off. Mayor Ihara attended an office meeting on Nov. 20.
On that occasion, he implied the possibility of resigning for a
mayoral election.

The turmoil was triggered by the government's interim report on the
US military's realignment in Japan that came out in October 2005.
The report announced a government plan to move 59 carrier-borne
fighter jets from the US Navy's Atsugi Naval Air Station in Kanagawa
Prefecture to the US Marine Corps' Iwakuni Air Station. After
realignment, Iwakuni base will deploy a total of 120 warplanes,
double its current deployment, and the base will be one of the
largest US airbases in the Far East, as well as the US Air Force's
Kadena base in Okinawa Prefecture.

TOKYO 00005345 005 OF 011

In March 2006, Mayor Ihara polled Iwakuni's residents on the
government's plan to relocate carrier-borne fighters to Iwakuni. In
that poll, nearly 90 PERCENT of those who voted were against the
government-proposed realignment plan. In response to this outcome,
the mayor has carried through his stance against the transfer plan.

Mayor Ihara was a Labor Ministry bureaucrat. In 1999, Ihara was
elected to Iwakuni's mayorship before the city's consolidation with
neighboring municipalities. Mayor Ihara has accepted the base's
presence itself. In 2002, he accepted the transfer of eight
heavy-lift helicopters from Hawaii. However, he is now in a position
to say: "The relocation of carrier-borne aircraft to Iwakuni is on a
large scale. It will impose a heavy burden on local residents, so
it's unbearable."

The work of constructing Iwakuni's new office building was started
in September 2005 before the government's interim report was out.
The cost of construction is 8.1 billion yen. The government decided
to subsidize the construction project with a total of 4.9 billion
yen. This subsidization was based on a Japan-US Special Action
Committee (SACO) agreement of 1996. In 1997, Mayor Ihara's
predecessor accepted the redeployment of aerial refueling aircraft
from Futenma airfield in Okinawa to Iwakuni. The government then
decided to subsidize Iwakuni in return for its consent to the
transfer of tanker aircraft to Iwakuni. The city was subsidized with
1.4 billion yen in fiscal 2005 and 2006.

In May 2006, however, Japan and the United States finalized their
talks over their plans to realign the US military presence in Japan,
incorporating an agreement on tanker aircraft relocation. The
government then called off its subsidization that was based on the
SACO accord. Meanwhile, Iwakuni was still opposed to the transfer of
air tankers to Iwakuni. In December 2006, the government notified
Iwakuni of its decision to call off its remaining subsidy of 3.5
billion yen for the final fiscal year.

(4) US military firms in Japan, too

AKAHATA (Page 1) (Full)
November 22, 2007

A US private-sector military firm has a contract to provide security
for the US forces' missile-defense radar site at the Air
Self-Defense Force's Shariki Base in the city of Tsugaru, Aomori
Prefecture, sources revealed yesterday. In Iraq, US military
companies carry out various security-related services for US
military personnel stationed there. However, they also have caused
serious problems in Iraq, such as killing or injuring civilians. The
presence of US military firms in Japan is also being called into

Chenega Blackwater Solutions is the US private-sector contractor
that provides armed security guards to protect the US military radar
site that houses the so-called "X-band radar." According to Tsugaru
City officials who were briefed by the government, Chenega assigns
about 60 personnel to the Shariki base.

In June last year, X-band radar, a missile defense radar system
designed to detect incoming ballistic missiles, was introduced to
the Shariki base under an intergovernmental agreement reached
between Japan and the United States connected to the realignment of
US forces in Japan. According to the Oct. 7 issue of the Stars &

TOKYO 00005345 006 OF 011

Stripes, a US military newspaper, the X-band radar is operated by a
detachment of about 100 personnel from the 94th Army Air and Missile
Defense Command. The detachment has only two US military personnel.
All the rest are from two US military contractors, Chenega
Blackwater Solutions and Raytheon.

Raytheon is a military company that develops and manufactures
weapons like missile defense systems, and about 40 personnel from
this company are operating the X-band radar.

In Iraq, Blackwater USA, a US private security company contracted by
the US Department of State to guard the US Embassy and provide other
security services, shot 17 local civilians to death in September.
The Iraqi government suspended this US military company's business
license, and the US Congress held a public hearing. Private military
firms are now under fire.

Tsugaru City's municipal government explains that the Chenega

personnel are "civilian employees." Japan has no primary
jurisdiction over them even if they cause incidents or accidents on
duty. That is because they are under the Japan-US Status of Forces
Agreement, which grants privileges to members of the US Forces

(5) Yamada Corp. asked defense lobby for favors over discontinued

ASAHI (Page 39) (Abridged)
November 27, 2007

Yamada Corporation, a defense-related trading company based in
Tokyo, asked the Japan-U.S. Center for Peace and Cultural Exchange,
an incorporated body with influential defense-related lawmakers on
its board of directors, around the summer of 2006 for favors over
the discontinuation of a subcontract on processing the Imperial
Japanese Army's poison gas. Naoki Akiyama, a permanent director of
the center, is said to be a channel between Japanese and US war
industries and political circles. Nichibei Bunka Shinkokai
(Japan-U.S. Cultural Promotion Society), the center's predecessor,
was also a contractor on the same undertaking. However, this
contract is also being called into question.

The Japan-U.S. Center for Peace and Cultural Exchange has former
Defense Minister Fumio Kyuma and others on its board of directors.
In the past, there were also Finance Minister Fukushiro Nukaga and
Defense Minister Shigeru Ishiba. Meanwhile, the Tokyo District
Public Prosecutors Office's task force has now arrested Notonobu
Miyazaki, 69, a former managing director of Yamada Corp., for
embezzlement and on some other charges. Miyazaki was also a director
of the center until last year. In connection with Miyazaki's
allegations, the task force searched the center's office and is now
analyzing those seized from there.

According to Defense Ministry and other sources, a seabed probe was
conducted at the port of Kanda in the town of Kanda, Fukuoka
Prefecture, for sea-route extension. At that time, the Imperial
Japanese Army's gas shells were discovered there and those had to be
removed for disposal. The first undertaking (in FY2004) and the
second one (in FY2005) were entrusted to the then Defense Agency.
The third undertaking in FY2006 and following projects were handed
over to the Ministry of Land, Infrastructure and Transport. At
present, the fourth project is going on. More than 1,200 shells were

TOKYO 00005345 007 OF 011

removed for disposal by FY2006.

In November 2003, the then Defense Agency held open competitive
bidding to start the projects. Yamada Corp., as an agent arranging
for American divers for salvaging gas shells, became a subcontractor
under a major steelmaker that became a contractor. However, the
Defense Agency decided to contract a domestic diving company during
the second project. Yamada Corp.'s subcontractor was discontinued.

Yamada Corp., according to its sources, planned to take part in
another project of that steelmaker to make up for its discontinued
subcontract. Yamada Corp. then asked the center to recommend it to
that maker.

(6) LDP's coordination of candidates for new Lower House election:
North wind blowing against "Koizumi's children"

MAINICHI (Page 5) (Slightly abridged)
November 27, 2007

With an eye on a possible dissolution of the House of
Representatives, the ruling Liberal Democratic Party (LDP) is now
hurrying to coordinate its candidates for the next Lower House
election. As Election Committee Chairman Makoto Koga and Vice
Chairman Yoshihide Suga have set standards for selecting "winning
candidates" and not giving special treatment to the so-called
"Koizumi children," freshmen lawmakers who won their seats in the
2005 Lower House election, the impact will adversely affect them. It
is uncertain that those lawmakers, who were elected to the Lower
House because their names were placed higher on the party's
proportional representation list, will be given high rankings on the
list for the next Lower House election. It is also difficult for
those Koizumi children who won Lower House seats after being
defeated in electoral district races to obtain official endorsements
to run in constituencies in which the former postal rebels (now
reinstated in the LDP) will run. One such lawmaker complained: "Are
we now disposable candidates?" Former LDP Secretary General Tsutomu
Takebe, regarded as a chief backer of the Koizumi children, said the
following in a party hosted by lawmaker Kuniko Inoguchi on Nov. 20:

"The LDP should set a slate for women also in the next Lower House
election so that it will be easy for the party to gain voter
understanding. In particular, former State Minister (in charge of
declining birthrate) Inoguchi is one of those who were asked by the
party leadership to run in the previous election."

He played up the need for treating Koizumi children favorably by
putting their names on the party's proportional representation list.
Of the freshman lawmakers who ran only in the proportional
representation segment in 2005, 14 were elected, and of those
lawmakers, those who were given preferential treatment include:
Inoguchi, whose name was put at top on the party's list of the
proportional Tokyo bloc; Tadayoshi Nagashima, at the top on the
North Shinetsu bloc list; and Mitsue Kondo, at the top of the Kinki
bloc list.

Suga noted on Nov. 25: "It is a big mistake if the Koizumi children
have been campaigning, thinking that they will be given favorable
treatment this time around as well." He took a negative stance
toward giving them preferential treatment in the proportional
representation segment. But it will be difficult for those freshman
lawmakers whose names are placed lower on the list than in the

TOKYO 00005345 008 OF 011

previous election to hold on to their seats in the next election,
even if they are allowed to run in the proportional representation
segment alone. Senior Election Committee members have urged them to
run in single-seat constituencies. The likelihood is that Taizo
Sugimura, who was 35th on the South Kanto bloc list in the 2005
election, will run in the Hokkaido No. 1 district; and Keisuke
Suzuki, 34th in the South Kanto, will run in the Kanagawa No. 7
district. Taku Otsuka, who was 29th on the proportional Tokyo bloc,
is eager to run in the Tokyo No. 5 district. However, since the LDP
won big in the previous Lower House election, there remain only 15
single-seat districts in which there is still no LDP candidate.

The LDP is having difficulties in coordinating candidates in four
single-seat constituencies where "assassin" candidates who won Diet
seats in the proportional representation segment after being
defeated in district races, are pitted against postal rebels who
rejoined the LDP after winning single-seat district races. The LDP's
Gifu City chapter held a party on Nov. 23 in the Gifu No. 1
district, in which Seiko Noda, a postal rebel who returned to the
LDP, and Yukari Sato, will compete. Both Noda and Sato attended the
party. Gifu City chapter chair Kazuhiro Tamaki sought to constrain
the LDP headquarters' top-down decision, saying:

"We cannot abandon one side (Sato) and help the other (Noda). If
party headquarters urges (Sato to transfer to other district), it
will be difficult for the LDP to secure a seat in the Gifu No. 1

However, coordination in the prefectural chapter seems to be

Suga indicated that the results of a poll by the LDP would become
standards for coordination of candidates. He stated: "Both think
they are the best choice. We should show them objective figures."
According to the LDP's survey so far, the number of districts in
which lawmakers rejoined the LDP, who are more popular and have
stronger organizational power than Koizumi children, is larger than
that of districts in which the freshman lawmakers are superior to
former postal rebels.

The former postal rebels, who rejoined the LDP, have gained
confidence that the party will back them. Should the LDP enter the
election split into two groups, the main opposition Democratic Party
of Japan (DPJ or Minshuto) would be able to fish in troubled waters.
To avoid this situation, the LDP executive will likely be forced to
walk a tightrope in carrying out coordination of the candidates.

(7) Prime minister puts on hold test-drilling of gas-fields in East
China Sea, out of consideration to China

SANKEI (Top Play) (Full)
November 23, 2007

The former Abe administration at one time decided to start
negotiations to compensate fishermen for fishery losses, a
precondition for starting test drilling to develop gas fields in the
East China Sea. However, this policy decision was put on hold after
the Fukuda cabinet was inaugurated. According to informed sources
yesterday, the policy switch reflects the intention of the Prime
Minister's Official Residence (Kantei). Japan and China have been at
odds over where both sides should jointly develop and other details
regarding gas field development. The Abe cabinet was determined to

TOKYO 00005345 009 OF 011

launch compensation negotiations in case there was no progress in
Japan-China talks by this fall.

Relevant government agencies started preparations for compensation
negotiations. The policy change, in a sense, underscores Prime
Minister Yasuo Fukuda's priority to relations with China.

In their meeting in April, former Prime Minister Shinzo Abe and
Chinese Premier Wen Jiabao agreed to come up with some specific
measures by this fall to settle the ongoing dispute over joint
gas-field development. However, a wide gap has been left unfilled
between Japan, which insists that development should be near the
Japan-China median line (an equa-distant line drawn between the
shores of Japan and China, and China, which cites an area between
the Japan-China median line and the Okinawa Trough (China-set
boundary line). No progress has been made in bureau-director-level
talks on gas-field development.

The Abe cabinet had decided to launch compensation negotiations with
parties that will be affected if test boring is carried out, such as
fishermen in Nagasaki and Okinawa prefectures. The administration
intended to demonstrate its strong determination by taking specific
steps toward test drilling.

The Fukuda cabinet, however, decided not to initiate negotiations
for the time being, because it has to devote itself to domestic
politics. The fate of such key bills as the new antiterrorism bill
remain uncertain in the current political situation, in which the
opposition bloc has control of the House of Councillors following
the Liberal Democratic Party's crushing defeat in the July Upper
House election. A government official was overheard saying: "The
administration, which cannot afford to deal with diplomatic affairs,
probably does not want to come up against China."

China repeatedly said in the bureau-director-level talks that If
Japan starts test boring, (the Chinese Navy) will dispatch a
warship. Some observers see this threat behind the Fukuda cabinet's
policy switch.

It was found in May 2004 that China began constructing a mining
facility called "Shirakaba or Chunxiao." Since then China
constructed four test-drilling facilities near the median line. In
reaction, then Minister of Economy, Trade and Industry Shoichi
Nakagawa had granted concession rights to Teikoku Oil Co. in April
2005. Later, though, his successor Toshiaki Nikai called a halt to
this move.

(8) Matsushita to mass-produce consumer fuel cells next fiscal year
as CO2 emission-cut measure

NIKKEI (Top Play) (Full)
November 27, 2007

Matsushita Electric Industrial Co. has decided to construct a plant
in Shiga Prefecture to mass-produce fuel cells for household use.
The company plans to begin operating the plant next fiscal year,
with the aim of turning out 10,000 units a year by FY2010. Ebara
Corp. and Toshiba Corp. are also planning to mass-produce fuel
cells. Fuel cells are a highly effective next-generation power
source with low carbon dioxide (CO2) emissions. A certain level of
performance is required for the products to become more widely used.
Now that the latest versions are close to this level, the government

TOKYO 00005345 010 OF 011

is looking into introducing a subsidy system. Given this, these
companies have judged that putting the products on the market will
become possible. The new technology that will contribute to
significantly reducing CO2 emissions from households is likely to
become widespread in the nation in a few years.

Matsushita has been making fuel cells at a development facility in
Moriguchi City, Osaka Prefecture, on a small scale. It now plans to
build its first dedicated plant in Kusatsu City, Shiga Prefecture,
at cost of 1-2 billion yen. This plant will initially produce 1,000
to 2,000 units a year and will gradually increase capacity. Models
using gas will be marketed by Tokyo Gas Co.

Ebara will expand its Fujisawa plant in Fujisawa, Kanagawa
Prefecture, to start in FY2008 producing 1,500 units compatible with
either gas or kerosene. The company plans to raise capacity to
10,000 units a year by FY2009. Toshiba Fuel Cell Power Systems Corp.
based in Minato Ward, Tokyo, a subsidiary of Toshiba Corp., will
finalize production plans within this fiscal year. Nippon Oil Corp.
plans to buy up the fuel cell business of Sanyo Electric Co., as a
step to start mass production.

A life span of 40,000 hours (about 10 years of operation 10 hours a
day) is considered a threshold for fuel cells to gain wide
acceptance. Now that the latest versions are near this mark, these
companies are preparing for mass production.

The manufacturing cost is estimated at 4-5 million yen per unit, but
the cost is expected to drop to about one million yen by 2010 owing
to mass production, as well as shared specifications and parts.
Manufacturers aim to lower the cost to 500,000 yen by 2015.

The government has provided subsidies -- several million yen for
each fuel cell installed at a house -- on a trial basis and has
promoted verification tests. The government is also considering such
incentive measures as offering subsidies or tax breaks for buyers in
FY2009 and beyond. Makers expect such official subsidies will
contribute to boosting sales.


Asahi, Yomiuri:
Former Vice Defense Minister Moriya to face criminal investigation
probably this week

Mainichi, Sankei:
Prosecutors to question Moriya as early as this week

Matsushita Electric to mass-produce fuel cells

Tokyo Shimbun:
Prosecutors eye indictment of Moriya on bribery charges

Government, ruling parties must heed the public's anger


(1) Gangland attacks must not be allowed
(2) New Australian administration expected to break away from

TOKYO 00005345 011 OF 011

US-centered foreign policy

(1) Expansion of mail delivery business and social mission
(2) New breeze from new Australian government

(1) ROK presidential poll closely associated with Japan's security
(2) Close cooperation between agriculture, commerce and industry
essential for revitalizing local economies

(1) Split conservative force and South Korean presidential race
(2) Can the life insurance industry restore public trust?

(1) Association of the Families of Victims of Kidnapped by North
Korea has new leader
(2) Strategic cooperation with new Australian administration vital

Tokyo Shimbun:
(1) Progress expected through Middle East Peace conference
(2) Opening juvenile trials requires careful study

(1) Article 9 must be kept intact


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UN: Guterres To Seek Second Five-year Term
António Guterres will be seeking a second five-year term as UN Secretary-General, which would begin in January 2022.... More>>